Natural Gas Reserves Discoveries Boost Indonesia’s Position as Major Oil and Gas Industry Player 

17 Jan 2024


Driven by multiple natural gas reserve discoveries, Indonesia emerged as a nation with considerable promise for the global oil and gas industry in 2024.  


Recent discoveries in the Andaman and North Ganal Blocks have increased the number of proven oil and gas reserves by at least 30%, pending further explorations by the blocks' operators. According to the Energy and Mineral Resources Ministry data in January 2023, Indonesia’s previous proven oil and gas reserves have reached 2.41 billion barrels (BBO) and 35.5 trillion cubic feet (tcf), respectively.  


In a significant development announced in late December 2023, Mubadala Energy reported the discovery of substantial gas reserves in the Layaran-1 Well, South Andaman Block. Located 100 kilometers off Sumatra's northern coast, the well could produce up to 30 million metric standard cubic feet per day (MMSCFD) and holds an estimated 6 tcf of gas. This discovery outstrips the Geng North-1 Well in East Kalimantan's North Ganal Working Area, operated by Italy's Eni. 


The Timpan-1 Well in the Andaman II Block, managed by Premier Oil, showed similar promise, with potential gas production of 27 MMSCFD and 1,884 barrels of condensate per day (BCPD), and an estimated 5-6 tcf of gas. These discoveries necessitate infrastructural preparation by the Indonesian government and oil and gas contractors (KKKS) for the production phase, including LNG processing plants, floating storage for distribution, and pipelines for gas transport. 


The Upstream Oil and Gas Regulatory Task Force (SKK Migas) anticipates production commencement from these wells between 2028 and 2030. This year, Indonesia is set to launch 15 oil and gas projects to significantly boost its energy production. According to SKK Migas, as reported by the Jakarta Post, these projects are forecasted to yield a combined output of 41,922 barrels of oil per day (bopd) and 324 million standard cubic feet per day (mmscfd) of gas. 


Meanwhile, Indonesia is planning to offer 10 new oil and gas blocks in 2024, according to an announcement by Energy Ministry Official Ma'ruf Affandi. The prospective areas include locations in the northern part of East Java province and near the offshore Andaman block in Aceh province. The first round of this offering is set for launch in May 2024. 


"In 2024 we are planning to offer 10 blocks. We are still working with the experts, but based on the information I have, it is quite promising," Energy Ministry Senior Tutuka Ariadji told reporters, as quoted by Reuters. 


Despite the excitement surrounding new offerings, Affandi noted a setback from last year's auctions: the Natuna D-Alpha block in East Natuna received no bids in the second round. However, there are plans to either put this block up for a joint study or a re-tender this year. 


The Natuna D-Alpha exploration block is noteworthy for its estimated 230 trillion cubic feet (6.5 trillion cubic metres) of gas resources, ranking among the world's largest. Yet, its development faces challenges due to its high carbon dioxide (CO2) content, a factor that has likely influenced the lack of bids in previous auctions.