New gas discoveries are expected to enhance the competitiveness of Indonesia’s upstream sector, analysts at BMI, a Fitch Solutions company, said in a report sent to Rigzone recently.
“The country’s exploration success in offshore areas has bolstered our outlook for its natural gas reserves and production,” the analysts noted in the report, adding that they project that Indonesia’s natural gas in-place reserves could increase by 11 trillion cubic feet in 2024.
“Exploration successes are reinforcing Indonesia's objective to reach gas production targets of 12 billion cubic feet per day by 2030,” the analysts went on to state.
In the report, the BMI analysts highlighted that, in October last year, Indonesia’s upstream regulator, SKK Migas, announced two “significant” natural gas discoveries in the Ganal North Working Area and the South Andaman Cooperation Contract (KKS).
The Ganal North Working Area in the Kutai Basin, operated by Eni, is estimated to hold five trillion cubic feet of natural gas-in-place and 400 million barrels of condensate, the analysts noted in the report, adding that “this discovery ranks as one of the largest in 2023”.
In a statement posted on its website back in October 2023, Eni announced a “significant gas discovery from the Geng North-1 exploration well drilled in North Ganal PSC, about 85km [52.8 miles] off the coast of East Kalimantan in Indonesia”. Eni said in that statement that acquired data “will allow to study the options for a fast-track development”.
The analysts also pointed out in the report that, in December 2023, SKK Migas revealed that Mubadala Energy (South Andaman) RSC LTD had discovered “substantial” gas reserves at the Layaran-1 well.
“The field has the potential to contain more than six trillion cubic feet of gas in-place, surpassing the Ganal North’s reserves,” the analysts said in the report.
“These new discoveries are significant additions to Harbour’s Timpan 1 discovery in the North Sumatra Basin in 2022 and to Eni’s portfolio of deepwater assets acquired from Chevron,” they added.
The analysts stated in the report that new gas discoveries signify Indonesia’s substantial strides in advancing its Indonesia Deepwater Development (IDD) program.
“The Geng North discovery encompasses numerous stranded discoveries within the Rapak and Ganal Production Sharing Contract (PSC) blocks. Indonesia's pioneering IDD projects, Bangka and the Gendalo-Gehem duo, together offer close to three trillion cubic feet of recoverable gas resources,” the analysts said in the report.
“The Bangka project commenced production in 2016, boasting a capacity of 110 million standard cubic feet per day and 4,000 barrels per day of condensate. The Gendalo and Gehem fields have the potential to be Indonesia’s deepest offshore gas developments, located in water depths reaching 6,000 feet,” they added.
“SKK Migas has projected that the Gendalo-Gehem project could achieve a peak gas production of 844 million cubic feet per day, with production commencement targeted for 2027,” they continued.
BMI analysts noted in the report that the potential rise in gas supplies from the Geng North field and other projects under the IDD initiative could help address the shortfall in feed gas LNG production.
“The Geng North project is poised to supply backfill volumes to the Bontang LNG plant, which is currently reported to be operating well below its designated capacity, at less than 20 percent of its nameplate capacity,” the analysts said in the report.
“Access to these gas reserves could permit Pertamina to restart dormant LNG trains at the Bontang plant, which boasts a capacity of 22.5 million tons per annum. With the prospect of additional feed gas supply, the facility is expected to maintain production until 2030 or longer,” they added.
“In response to a significant discovery by Mubadala Energy, Indonesia’s Ministry of Energy and Mineral Resources (MEMR) intends to make another 10 oil and gas blocks available in the North Sumatra Basin in 2024,” they continued.
The analysts stated in the report that the exploration of untapped and high-potential regions is essential for Indonesia to realize its ambitious production goals.
According to the Energy Institute’s latest statistical review of world energy, which was released last year, Indonesia produced 57.7 billion cubic meters of natural gas in 2022. That figure represented a 2.7 percent year on year drop and 1.4 percent of total natural gas production that year, the review outlined. From 2012 to 2022, Indonesia’s natural gas production declined by an average of 3.0 percent every year, the report highlighted.
Total Asia Pacific natural gas production came in at 681.3 billion cubic meters in 2022, which represented 16.8 percent of total natural gas production that year, the review outlined. The region with the highest share of natural gas production in 2022 was North America, according to the review, which showed that this region produced 1203.9 billion cubic meters last year. That figure marked 29.8 percent of total natural gas production in 2022, the review revealed.
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