July 30, 2024
JAKARTA – Chinese companies Sinopec and Petrochina are participating in a joint study to explore the oil and gas potential around Buton and Timor in eastern Indonesia, the Energy and Mineral Resources Ministry has announced.
Ariana Soemanto, director of upstream oil and gas business development at the ministry’s oil and gas directorate general, said the joint study and planned oil and gas blocks auction were part of Indonesia’s effort to discover more oil and gas reserves.
He went on to say that the ministry had announced the two areas as joint study sites in June.
“After the joint study is complete, [we will] offer the oil and gas working areas, determine the winners and begin oil and gas exploration,” he said in Batang, Central Java, according to a statement issued on Saturday.
The government also offered five oil and gas blocks in May during the Indonesia Petroleum Association (IPA) Convex, in which Chinese companies were also participating.
“It will be announced at the right time,” Ariana said in a separate statement, also issued on Saturday.
To date, Sinopec is preparing to work with Pertamina Hulu Energi (PHE), the upstream arm of state-owned oil and gas company Pertamina, to launch enhanced oil recovery (EOR) projects in several of PHE’s depleting oil and gas fields.
Operators resort to EOR to increase the amount of crude oil extracted from an oil field.
Sinopec and Pertamina are in the process of obtaining permits to access the oil and gas database. Afterward, the two companies are slated to sign confidentiality agreements.
“This is [so that] the oil and gas directorate general, SKK Migas and Pertamina could work together to expedite [the process] of working together with the Chinese companies,” he added.
The government has announced plans to offer 12 domestic EOR projects with potential estimated reserves reaching 951 million stock tank barrels (mmstb). Most of the oil and gas blocks are owned by PHE.
As of Jan. 1, 2022, there are dozens of basins with potential oil resources amounting to 23.6 billion barrels of oil (bbo) and 271.4 trillion cubic feet (Tcf) of gas that are yet to be explored, data from Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) show.
Three basins with the highest potential oil content are located in South Sumatra, North Sumatra and East Java, with expected oil reserves of 3.5 BBO, 2.7 BBO and 2.7 BBO, respectively.
The three most promising basins for gas reserves, on the other hand, are spread across Bintuni, North Sumatra and Aru-Tanimbar with estimated reserves of 72.7 Tcf, 51.3 Tcf and 23.7 Tcf, respectively.
Ariana said the government would provide attractive terms and conditions for oil and gas contractors (KKKS) wanting to continue exploration in the blocks that have been mapped by the upstream oil and gas authority.
“We no longer require gross-split contracts. In addition, the split for cooperation contracts could be more than 50 percent,” Ariana said on May 16.