Indonesia opens bidding for three shale gas blocks

Drilling rig
Source: DollarPhotoClub

Indonesia – the tenth richest shale oil country in the world, according to the U.S. Energy Information Agency – has invited bids for three shale gas blocks – Blora, onshore Central and East Java; Batu Ampar in East Kalimantan; and Central Bangkanai, onshore Central and East Kalimantan – according to a statement on the energy and mines ministry’s website Monday. The bids have to be submitted by December 15, it added.

The country – which is estimated to hold shale oil reserves of eight billion barrels and shale gas reserves of 574 trillion cubic feet – is eager to explore its shale reserves in the hope that it will compensate for declining energy production from mature oil and gas fields.

The government has identified seven shale gas basins in Indonesia, including Baong, Telisa and Gumai, which are located in Sumatra and believed contain of the biggest reserves of gas; two basins on Java island and two others in Kalimantan.

The former OPEC member, Indonesia has been struggling for years to attract enough investment to halt declining domestic output, which has dropped to about half of its 1995 peak of 1.6 million barrels per day. Apart from investing in exploration of its domestic shale reserves, which the government believes are higher than the country’s potential for coalbed methane and natural gas, Indonesia is now looking to purchase LNG from the U.S.

The country’s oil and gas company, Pertamina, announced in October last year that is planning to add 1 million tonnes a year from an unnamed American source to the already agreed purchase of 1.6 million tonnes a year from U.S.-based Cheniere Energy Inc starting 2018. Pertamina was also planning to set up an LNG trading desk in Singapore in 2015, where two LNG trades and an in-house strategist would trade physical cargoes.

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