Indonesia offers six oil and gas blocks in second bid round of 2024

The Indonesian government has offered six onshore and offshore blocks -- estimated to contain 48 billion barrels of oil equivalent in oil and gas -- in its second bid round of the year, a senior official at the Ministry of Energy and Mineral Resources said late Dec. 3.

This brings the total number of oil and gas blocks offered to 11 this year, in addition to the five offered in the country's first bid round in May. The country offered 10 blocks in 2023.

Of the six blocks offered, Air Komering in onshore South Sumatra -- expected to contain 307 million boe of oil and gas -- is up for regular auction. For this block, investors can choose between a cost recovery mechanism with a 60:40 profit split for oil and 55:45 for gas, or the gross split scheme with 53:47 for oil and 51:49 for gas, according to Dadan Kusdiana, the ministry's acting oil and gas director-general.

The remaining five blocks are being auctioned through direct offers, as joint studies have previously been conducted in these areas. The tender will favor companies that led such studies.

These include the Binaiya Block offshore Maluku in eastern Indonesia, expected to hold 6.7 billion barrels of oil and 15 Tcf of gas; the Serpang Block offshore East Java, with potential reserves of 1.2 billion barrels of oil and 6.3 Tcf of gas; and the Kojo Block in the offshore Makassar Strait, with estimated reserves of 90.2 million barrels of oil and 2.1 Tcf of gas.

The remaining two blocks are located in West Papua -- the Gaea I Block, with potential reserves of 9.6 billion barrels of oil and 71.8 Tcf of gas, and the Gaea II Block, with estimated reserves of 8.5 billion barrels of oil and 35.1 Tcf.

"These two blocks [in West Papua] have the largest potential at around 30 billion barrels equivalent," Kusdiana said.

The ministry also announced its latest discovery of oil and gas potential in the Western Indonesia Phase 2 (IBB 2) area, totaling more than 4.3 billion boe across four regions -- the East Natuna Basin, Makassar Strait Basin, Southeast Java Basin and Barito Basin, according to a Dec. 3 statement.

"The focus of the team's study is in East Natuna, Makassar Strait, Southeast Java and Barito. The results from just two areas alone have a potential of more than 4.3 billion boe, with East Natuna accounting for around 2.8 billion boe and Southeast Java at least 1.5 billion boe, with a potential range of 1.5 to 17 billion boe," Nanang Abdul Manaf, the ministry's oil and gas E&P enhancement expert, said. "This does not include the potential in the Makassar Strait and Barito."

This comes as the country works toward its 2030 national production target of 1 million b/d of oil and 12 Bcf/d of gas.

The ministry expects its 2024 oil and gas output to reach 592,100 b/d of oil and 990,000 boe/d of gas, falling short of its target of 1.668 million boe/d for the year. It had also lowered its projected 2025 output by 4% and aims to produce 1.605 million boe/d of oil and gas next year.