AsianOil: Indonesia kicks off six-block oil and gas auction

Indonesia has kicked off its first oil and gas auction of the year, offering five blocks for exploration, as part of its strategy to reverse the decline in output in a country that was once a net oil exporter, Energy Minister Arifin Tasrif said during the Indonesia Petroleum Association's annual conference on May 14.

"To meet oil and gas demand, Indonesia is currently focusing its efforts on exploring oil and gas basins considering that Indonesia still holds abundant untapped oil and gas reserves," stated Tasrif. He highlighted that out of 128 hydrocarbon basins in the country, 68 remain completely unexplored.

The blocks offered in the auction include significant sites with substantial resource potential. Among them is the Pesut Mahakam onshore block in East Kalimantan, estimated to hold 1.1 trillion cubic feet (31bn cubic metres) of gas. Additionally, the Central Andaman exploration blocks are estimated to contain 100mn barrels of oil and 500bn cubic feet (14 bcm) of gas, according to Dadan Kusdiana, a senior official at the energy ministry.

Also included in the auction is the Melati block in Sulawesi, which encompasses both onshore and offshore fields. This block is estimated to hold 4.7 tcf (133 bcm) of gas and 850mn barrels of oil.

Earlier this year, an official stated that the government plans to offer up to ten new blocks in 2024. These offerings might include gas blocks in the northern Sumatra region. Its auctions so far have had mixed results, however, with six oil and gas blocks offered in 2023 remaining unsold. 

Beyond the auction, Indonesia signed a production sharing contract (PSA) with Malaysia's Petronas for the Bobara block off West Papua. The government also signed an amended contract for the Ketapang block off Java with Petronas and its partners. The total combined investment commitments for these two contracts come to approximately $97mn.

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