The Ministry of Energy and Mineral Resources (ESDM) has recently disclosed that Indonesia possesses a substantial “treasure trove” of untapped oil and gas reserves that hold significant potential for further development.
Remarkably, the country still holds treasure trove of oil reserves of around 2.4 billion barrels and 45 trillion cubic feet (TCF) of gas, which are yet to be exploited.
Arifin Tasrif, the Minister of Energy and Mineral Resources, explained that Indonesia’s oil and gas exploration activities were notably aggressive in the past, particularly in the year 2012. This enthusiasm was fueled by the appealing prospects of oil prices during that period.
However, the drilling of exploration wells, worth a total of US$2.5 billion, resulted in dry holes, disappointing investors and leaving them skeptical of the current conditions. In light of this, Minister Arifin emphasizes the importance of reinvigorating investment activities in the upstream sector, leveraging the existing potential.
Arifin expressed his confidence, stating, “When we look at the remaining 2.4 billion barrels that we can still extract (our treasure trove) and the 45 TCF of gas, along with numerous ongoing exploration activities in various regions, it becomes evident that we possess substantial potential.”
Furthermore, Arifin shared an insightful overview of Indonesia’s seismic survey initiatives carried out between 2016 and 2020. These large-scale survey efforts successfully identified five areas with promising oil and gas prospects.
However, the response from investors towards these five areas was relatively lukewarm. Recognizing the need for improvement, the government welcomes suggestions and inputs from investors to enhance the investment climate in the country’s upstream oil and gas sector.
“We are open to input from investors, as our domestic investment attractiveness needs to be enhanced. We have plans in place, including the introduction of the gross split concept, the reopening of cost recovery mechanisms, and improvements in fiscal terms,” Arifin explained.
Minister Arifin Tasrif also revealed the significant oil potential within the Warim Block in Papua, stating, “The Warim Block alone holds an estimated 25 billion barrels of oil. Even if we can extract only 20% of this potential, it would already be a significant contribution of 5 billion barrels to Indonesia.”
Additionally, he highlighted the substantial gas potential, which reaches up to 47 TCF. This figure exceeds the gas potential of the Masela field and is on par with the renowned Natuna field, with the distinction that Natuna’s gas reserves contain higher levels of carbon dioxide. The Minister emphasized the importance of striving to maximize these opportunities.
Despite the vast potential for development, the area encompassed by the Warim Block falls within the boundaries of the Lorentz National Park, a protected forest area. Minister Arifin acknowledged that neighboring Papua New Guinea has already successfully extracted oil and established liquefied natural gas (LNG) facilities, emphasizing the need for Indonesia to unlock its own potential.
To optimize the natural resources available within the country, the Indonesian government aims to enhance the utilization of these resources and avoid relying solely on imports, which would lead to a loss of foreign exchange.
Minister Arifin expressed the need for proactive measures, stating, “We need to be proactive in finding solutions. We are currently engaging in discussions with the Ministry of Environment and Forestry, while considering the UNESCO designation. Our objective is to find a favorable resolution that allows us to capitalize on these resources responsibly.”
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