Exploration is needed to support Indonesia’s future energy needs
Oil and gas are non-renewable energy resources and cannot be readily replaced by natural means at a quick enough pace to keep up with consumption. The Ministry of Energy and Natural Resources have stated that Indonesia's oil reserves of around 3,77 billion barrels will run out in about 9 years at today's production rate, while for the gas reserves of 77 trillion cubic feet (TCF), these reserves will be exhausted in around 21 years.
The Government is therefore pushing for more exploration activities because Indonesia's energy demand is growing higher every year. Exploration involves the search for rock formations associated with oil or natural gas deposits and it involves geophysical prospecting and/or exploratory drilling activities. Indonesia has 73 potential oil and gas basins that still need to be explored to locate new reserves which need to be changed from reserves into production.
Minister of Energy and Natural Resources, Arifin Tasrif, has stated that Indonesia urgently needs to carry out exploration, especially in frontier areas. “We do need to make a more detailed map of our offshore oil and gas potential resources. It is needed to increase our oil and gas production,” he said.
Even so, oil and gas exploration is a big commitment. According to the Deputy Chairman of the 7th Commission of the House of Representatives, Bambang Murwanto, exploration needs big investment and technical efforts. Due to the high risks of exploration, the investors should be firm and confident of their decision prior to starting the exploration activities.
“It is true that a big reserves discovery is needed in order to increase our oil and gas production, but a big discovery means a big exploration cost. The question is who will be brave enough to do it,” he said.
Member of the 7th Commission of the House of Representatives, Mulyanto, added that the Government has to provide incentives for attracting investors to carry out exploration activities in Indonesia. In addition, the business processes and permitting that is required for exploration also need to be simplified.
“Regarding the oil and gas preliminary data improvement and the simplified licensing process, and including defining the split if an investor finds new reserves, these all need to be discussed to attract more investors,” he said.
As we are all aware, in the early part of 2019, Repsol SA announced a new gas reserves discovery of around 2 TCF in the Sakakemang Block, South Sumatera. Then, at the end of last year, Pertamina started a large scale 2D seismic activity program covering an area of 30,000 kilometers from Bangka to Papua. However, in spite of these successes and new programs, Indonesia still needs more exploration activities and investment.