British oil and gas major BP and Malaysia’s Petronas have signed production sharing contracts (PSCs) for three oil and gas exploration blocks in Indonesia.

BP has entered into a 30-year PSC for the Agung I and Agung II blocks. Agung I covers an area of 6,656 square kilometres of deepwater offshore Bali and East Java. The Agung II Block is located in deepwater offshore South Sulawesi, West Nusa Tenggara and East Java covering an area of 7,970 sq km. According to BP, the area is underexplored with significant potential for gas resources close to growing gas demand.

Petronas signed its PSC for the North Ketapang Block located onshore and offshore East Java. It holds a 100% equity in the 3,131.8 sq km block with water depths of up to 100 metres below sea level.

The Upstream Oil and Gas Special Regulatory Task Force (SKK Migas) signed the contracts on behalf of the government of Indonesia, in Jakarta.

“Considering BP and Petronas’s capabilities and experience as international oil companies with ever-growing oil and gas production in Indonesia, we believe they will invest sustainably and fulfil the commitments made in the working areas,” says SKK Migas head Dwi Soetjipto.

Long history

The signing of the PSCs followed the decision in March to award the exploration blocks as part of the second phase of the 2021 Oil and Gas Working Area Bid Round.

“Our presence in Indonesia is now extended from the east in Papua Barat through our Tangguh LNG, the largest producing gas field in Indonesia where we are also progressing one of our major CCUS (carbon capture, utilization and storage) projects, to the west in Aceh through our partnership in Andaman II and now is complemented by adding Agung I and Agung II in East Java," says Nader Zaki, BP regional president for Asia-Pacific.

BP has more than 55 years of history in Indonesia. Tangguh LNG in Papua Barat is the largest gas-producing field in country, currently contributing 20% of national gas production. This will increase to more than 30% once Tangguh's Train 3 starts up following the completion of the Tangguh Expansion Project.

BP also has non-operated interest (30%) in Andaman II PSC, an offshore Deepwater exploration block in Aceh.

In addition, Air BP is the only private company supplying jet fuel in Indonesia, while Castrol has nationwide sales and distribution.

Other projects

Petronas is also the operator for the Ketapang PSC and North Madura II PSC, offshore East Java, and is a joint venture partner in six other PSCs located both onshore and offshore Sumatra, Natuna Sea, East Java, as well as East Indonesia.

“The signing of the North Ketapang Block further enhances Petronas’ existing upstream portfolio in Indonesia, providing the opportunity to address the growing energy demand of the country, says Mohd Redhani Abdul Rahman, Petronas vice-president of exploration, upstream.