JAKARTA May 17 Indonesia opened a rights tender
for 21 oil and gas exploration blocks on Friday, four of which
are for unconventional gas concessions on the islands of Borneo
and Sumatra, as Southeast Asia's largest economy moves to shore
up its energy security.
Besides two shale gas blocks and two coalbed methane blocks,
the tender includes 17 offshore blocks that are mostly in the
eastern half of the archipelago, according to a release from the
Energy and Mineral Resources Ministry.
Indonesia is struggling to reverse declining oil and gas
output to meet expanding energy needs amid uncertainty over
regulatory and other issues that have put off investors in the
The areas being offered are estimated to contain up to 3.1
billion barrels of oil and 57.6 trillion cubic feet of gas,
according to Edy Hermantoro, the ministry's director general of
oil and gas.
The first round of bidding on the blocks is scheduled to
begin in mid-June.
Most of the offshore blocks will require overseas investors
to carry out exploration, Lukman Mahfoedz, Indonesia Petroleum
Association (IPA) president told Reuters during an interview
"The national companies cannot cover the risks in the
deepwater drilling in eastern Indonesia, where one well costs
$200 million," Lukman said.
Those blocks would require the participation of
international oil companies, he said.
The coalbed methane blocks are located on Kalimantan, as the
Indonesian portion of Borneo is known. One of the shale gas
blocks is on Sumatra island, and the other in Kalimantan.
State oil and gas company Pertamina this week signed a
30-year contract on Indonesia's first shale gas concession that
it said may lead to $8 billion in development costs - although
it also said it would need to tap into the expertise of Canada's
Talisman Energy to exploit the unconventional resource.
Indonesia's oil output has fallen to around 830,000 barrels
a day, nearly half of levels seen in the 1990s. Its gas output
dropped to about 8.2 billion cubic feet a day last year, down
about 12 percent from 2010.
(Reporting by Fergus Jensen; Editing by Tom Hogue)