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The Ministry of Energy and Mineral Resources said it had terminated six oil and gas exploration contracts, because the contract-holders had failed to discover enough reserves to make production economically feasible.

“We have decided to terminate six oil and gas contracts,” Sutisna Prawira, the ministry’s head of law and communications, said on Thursday.

“These blocks would be handed back to the government,” he added.

Five of the terminated exploration contracts failed to uncover sufficient reserves.

These are the Nila block in West Natuna Sea held by Conocophillips Nila, the North Bali block I in Bali held by Santos (NTH Bali), the Sakakemang block in South Sumatra held by Pertamina and Conocophillips (Sakakemang), the Northeast Madura IV block in East Java held by Petronas Carigali (Northeast Madura IV) and the Bawean I block in East Java held by BP Bawean.

The sixth contract covers the Bone Block in South Sulawesi, held by Energy Equity (Bone Bay). This contract was terminated because the company had not conducted any exploration.

The government has awarded 140 contracts to develop oil and gas blocks since 2001. Of these, 131 remain in the exploration stage.

Production has begun in one — in the Wailawi block in East Kalimantan — while production is about to begin on two others — the Cepu block at the border of East and Central Java, and the Bangkanai block in Central Kalimantan.

Revenue from oil and gas exploration has soared from $3.39 billion in 2000 to $12.10 billion in 2008. It is expected to total $13.17 billion this year.

In a related development, upstream oil and gas regulator BPMigas warned all oil and gas contractors to comply with its April regulation requiring them to use state-owned banks for their financial transactions and threatened to fire executives of companies who did not.

“I’ll remove the contractors’ executives and their costs won’t be reimbursed through the cost recovery scheme,” BPMigas deputy chairman Hardiono said on Thursday.