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Indonesia’s Expansion in North Sumatra Basin

ByDayne Lee

Feb 21, 2024

Indonesia is poised to expand its oil and gas exploration efforts in the North Sumatra basin following a significant discovery by Mubadala Energy, as the country aims to ramp up gas production. Tutuka Ariadji, the director general for oil and gas at the energy ministry, revealed plans to offer additional energy blocks for auction this year, with a particular focus on the North Sumatra basin.

Potential Exploration Areas

The energy ministry is currently evaluating various energy blocks for potential auctioning in the upcoming year. Tutuka highlighted the North Sumatra basin as a promising area for further exploration, citing the recent major discovery made by Mubadala Energy at the Layaran-1 well.

Mubadala’s Discovery

In December, Mubadala Energy, based in the United Arab Emirates, announced a significant deep-sea gas discovery through the Layaran-1 well in the South Andaman Block, located off the northern coast of Sumatra. The discovery revealed potential gas reserves exceeding six trillion cubic feet (tcf), making it one of the world’s largest deep-water discoveries in 2023.

Auction Details

While the specific number of blocks to be offered this year was not disclosed, Tutuka stated that the first tender round is scheduled for mid-May. In 2023, Indonesia offered 10 oil and gas blocks, with five ultimately awarded to contractors. Notably, the Bobara block was secured by a subsidiary of Malaysia’s national energy company, Petronas, in a recent auction.

Future Opportunities

Looking ahead, Indonesia remains committed to expanding its energy exploration initiatives to harness its vast natural resources effectively. The Natuna D-Alpha exploration block, among others, holds promise for future development and investment opportunities in the region.

Indonesia’s decision to offer more energy blocks in the North Sumatra basin underscores its determination to capitalize on recent discoveries and accelerate gas production. By fostering collaboration with international energy firms and promoting transparent auction processes, Indonesia aims to drive investment and innovation in its energy sector, ultimately contributing to economic growth and energy security.

Featured image credit: imaginima via iStock

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.