After Being Returned To Pertamina, The East Natuna Block Will Be Re-auctioned

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) is pushing for the acceleration of the development of the East Natuna Block in the Riau Islands which has stalled for more than 45 years.

The government plans to auction back the East Natuna Block after Pertamina's process of returning the block is complete.

"If we don't take it quickly at this time, forget it! Just leave it because in the future, 10 to 20 years it's time to renewable energy," said Director General of Oil and Gas Tutuka Ariadji in an official statement, Wednesday, November 30.

Tutuka added that his party was in the middle of processing the return of the East Natuna Block manager from Pertamina to the state, then after that a re-tender will be carried out.

"In the past, the assignment to Pertamina, we returned it to the state first. Then we will auction open tenders, especially for D-Alpha," explained Tutuka.

The East Natuna block is planned to be divided into 3 blocks, where D-Alpha is the largest oil and gas block.

The process of returning the East Natuna Block to the state is expected to be completed this year, so that the re-auction can be carried out at the beginning of next year.

"If it can be finished this year, early next year we will announce the auction," he said.

To attract investors, the government is also working on special incentives for the block.

"It must be significant for East Natuna. We are calculating, but it must be very interesting," added Tutuka.

The East Natuna block was discovered in 1973 and has yet to be developed. The East Natuna block stores a potential of trillion cubic feet (Tcf) with a recoverable gas potential of 46 Tcf.

The main obstacle to developing this block is the CO2 level which reaches 72 percent.

This block was originally managed by ExxonMobil and got its management rights in 1980. However, due to no progress, in 2007 the contract was terminated.

A year later, namely 2008, East Natuna was handed over its management to PT Pertamina.

Next, ExxonMobil, Total and Petronas, join. Petronas' position was later replaced by PTT Exploration and Production (PTT EP) in 2012.

Unfortunately in 2017 this consortium disbanded on the grounds of not being economical and leaving PT Pertamina.