Accelerate Exploration Process, SKK Migas Validates The Amount Of Gas Potential In Andaman Block

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) will focus on validating gas potential in large gas sources (giant disclosures) in Andaman Block, about 100 kilometers north of Sumatra.

This first priority aims to confirm the large reserves of gas and condensates in the Working Area (WK), so as not to cause speculation in the community.

Head of the SKK Migas Program and Communication Division, Hudi D Suryodipuro, explained that this information about the giant disclosure has become a breath of fresh air for the upstream oil and gas industry in Indonesia.

Therefore, the acceleration of the exploration and production process is highly anticipated considering that gas will become Indonesia's mainstay energy source.

"The process of proving and validating the amount of gas reserves and condensates is urgently needed as the basis for taking the steps and development of supporting infrastructure needed for the onstream acceleration process," Hudi said in a statement to the media, Tuesday, January 9.

As is known, the Cooperation Contract Contract Contractor (KKKS) Mubadala Energy, a company from the United Arab Emirates at the end of 2023 announced the discovery of a large natural gas reserve in place in the South Andaman Working Area (WK) with a potential of more than 6 TCF (trillion cubic feet).

The finding of this jumbo gas comes from the Screen Exploration Well-1.

The South Andaman Working Area is an oil and gas WK which was auctioned in 2018 and was only signed a management contract by the Ministry of Energy and Energy's ESDM and Mubadala in February 2019 using a gross split contract mechanism.

However, Hudi regretted some inaccurate and speculative information regarding the findings of these gas reserves.

One of the misinformations is as if the reserves found were oil with the potential to reach billions of barrels.

In fact, these findings are also linked to the elimination of poverty in Aceh.

"This information is certainly very misleading and misleading, so it needs to be straightened out so as not to cause speculation in the public, especially for the people of Aceh," explained Hudi.

Based on data from the Ministry of Energy and Mineral Resources (ESDM), the total resources in the Andaman area are estimated at 4,965 million barrels of equivalent oil (MMBOE). There are currently two large consortiums of KKKS, namely Harbor Energy and Mubadala Energy.

Currently, the discovery of jumbo gas in South Andaman is still in the early stages of exploration. Mubadala Energy is conducting a series of tests such as core analysis, fluid analysis, then post-drill analysis.

Later, from the exploration and appraisal wells, the Exploration Status Determination (PSE) will be prepared as the basis for the development plan or Plan of Development (PoD) according to the results of technical studies, economics, development scenarios, to commercialization.

"Regarding infrastructure, including the construction of the LNG refinery, it will be answered after the POD is completed. In general, the discovery of this gas will really need infrastructure to be commercialized," said Hudi.

For information, the President Director of Mubadala Energy Indonesia, Abdulla Bu Ali visited the Office of the Ministry of Energy and Mineral Resources on January 5, 2024.

During the visit which was also attended by the Minister of Energy and Mineral Resources, the Director General of Oil and Gas, and the Head of SKK Migas, Abdulla conveyed the results of the Screen-1 Drilling and provided the latest developments regarding Ruby's operational activities and cooperation in the Geothermal sector with Pertamina and Chevron, which are Mubadala Energy's efforts to support the energy transition.

Previously, the President Director of Mubadala Energy Indonesia, Abdulla Bu Ali, said that this discovery was part of the Mubadala Energy program in the future in supporting Indonesia's 2030 production target, namely 1 million barrels of oil per day and 12 billion cubic feet of natural gas per day.

"Indonesia has tremendous potential related to oil and gas reserves, this discovery should be grateful for and is expected to support the production target by 2030." he said.

After this discovery, Mubadala Energy will accelerate the process towards online. If according to plan, we hope that by 2030 the South Andaman project will be able to start onstream.

According to Abdulla, his party needs support from various parties so that the plan can be realized.

"We hope for support from all stakeholders so that we can continue this discovery and can help to achieve the targets set by the government," he said.

Abdulla admitted that in recent years, many improvements have been made by the government in terms of legal certainty and fiscal term.

Moreover, he continued, the government has relaxed and provided flexibility in terms of gross split contract mechanisms and cost recovery.

"Indonesia is one of our investments considering the huge potential that exists, especially in terms of clean energy such as natural gas, is in line with the company's strategy to support the energy transition," he said.