24 September 2013, News Wires – Indonesia is planning to put shale gas blocks up for auction by the end of the year, according to local media reports.
The Jakarta Post on Tuesday said the government was offering up a pair of blocks as part of its long-term plan to develop unconventional hydrocarbon resources across the archipelago.
Energy & Mineral Resources Ministry director for upstream oil and gas, Hendra Fadly, told the paper his office was currently assessing the Kisaran Block in North Sumatra and the West Tanjung Block in South Kilamantan.
“They [Kisaran and West Tanjung] are located in the conventional natural gas field. We, however, estimate that the two blocks have shale gas reserves,” Hendra was quoted as saying.
The ministry is expected to take about three months to finalise its evaluation of the blocks before they are offered through direct bids.
Meanwhile, the ministry’s director general for oil and gas, Edy Hermantoro, told the Investor Daily on Tuesday that Indonesia would offer up to eight shale gas production sharing contracts to oil and gas companies that have conducted studies alongside the government.
These blocks are located in East Kalimantan, South Kalimantan and Sumatra and the deals are expected to be finalised by the end of this year, Hermantoro said.
According to reports, the PSCs will be awarded to state-owned PT Pertamina and private oil and gas companies including foreign players.
A spokesperson for the Energy & Mineral Resources Ministry was not available for comment when contacted by Upstream.
Earlier this year, Pertamina was awarded the Sumbagut Block in North Sumatra to develop Indonesia’s first shale gas project. The company said it planned to spend $7.8 billion to explore the block with the intention of producing up to 100 million cubic feet per day of gas from the project by the year 2020.