The Government is to make Nonconventional Oil and Gas Roadmap

KATADATA - Energy and Mineral Resources (EMR) Ministry is currently preparing a roadmap about nonconventional oil and gas blocks. This roadmap is to be developed in order to attract investors to invest in nonconventional oil and gas sector. 

“It includes several investments that are hoped to happen, and the [target] for the result to happen,” I.G.N. Wiratmadja Puja, EMR Ministry’s oil and gas director general, said to the reporters, Tuesday (10/11).

The potential of nonconventional oil and gas reserve in Indonesia is very large. Coal bed methane (CBM) reserve in Indonesia reaches 453 trillion cubic feet (TCF), and shale gas reserve reaches 575 TCF. This potential is larger compared to conventional gas reserve, which is only 170 TCF.

Wiratmadja even said that the nonconventional oil and gas potential in Indonesia is one of the largest in the world. Indonesia’s CBM and shale gas reserves are larger than Australia’s, which has 350 TCF of CBM reserve and 390 TCF of shale gas reserve. This is interesting since Australia is the fourth largest exporter in the world. 

Even though the potential in Indonesia is very large, nonconventional oil and gas sector in this country is not developed well. The reason for this is because the technology and regulations are not adequate to support the development. In order to fix it, EMR Ministry has issued EMR Ministerial Regulation No. 38 Year 2015 about the acceleration of nonconventional oil and gas business development. 

In the regulation, there are two new schemes beside the production-sharing contract (PSC), which are net sliding scale PSC and gross split sliding scale. With the ministerial regulation, contractors that have fulfilled 60 percent of their exploration commitment are allowed to change their contracts with the new schemes. 

EMR Ministry’s upstream oil and gas business development director Djoko Siswanto said that since 2009 until now, there have been 54 contractors that work in nonconventional oil and gas blocks, which consist of 50 CBM work areas and four shale gas areas. All of them are still in exploration phase and not even one of them is productive yet.