It has been reported that Indonesia plans to put 21 oil and gas blocks out for tender in 2016. Working with both conventional and unconventional blocks, the government is seeking to attract investment as a way to secure the nation’s future energy demands. The country has also revealed that it may not meet oil production targets set for the year.
As part an on open tender, the Indonesian government will be looking to offer existing gas and oil fields, coal bed methane blocks and shale gas blocks. The director-general of gas and oil at the government’s Ministry of Energy and Mineral Resources (MEMR), Wiratmaja Puja, said: “The number of [oil and gas] working areas on offer has been declining from year to year. We expect that the number [of areas] will increase next year as a result of breakthroughs by the exploration team.” He went on to add that eight of the 13 conventional gas and oil blocks will be available through regular tender: Tomini Bay I, II, III and IV, SE Mandar, Merauke, West Misool and Gorontalo Tomini I. The remaining five blocks will be available through a joint study scheme.
There will also be a number of unconventional blocks available for tender: Jambi, Central and East Sumatra; Central Sumatra; and South East Sumatra. The MEMR also suggested that five coal bed methane blocks would be offered from Bunga Mas, Raja, Southern Sumatra, South Bengara and West Air Komering.
The news comes after Indonesia has struggled in recent years to prevent oil production falling, largely due to old wells in maturing fields. Despite the desperate need for investment, foreign gas and oil firms have not been forthcoming in investment due to the large amount of bureaucratic red-tape. There have also been previous corruption scandals that have soured potential business. As a result, crude oil and expensive petroleum products have needed to be imported in recent years to ensure local energy demand was met.
It was recently reported that over 10 companies have had to revise their 2015 production thresholds downwards, which means that Indonesia may well miss its production target for the year. Project delays mean that production may only come in at 812,000 barrels per day, while targets were set at 825,000. The reduced figure has been blamed on a riot that took place in August, delaying production in Exxon Mobil Corp’s East Java oil block as a result.
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