Resource-Rich Aceh will see incoming investments and realization of exploration plans in the near future, Vice President Jusuf Kalla has said.
“ Inn the very near future, offshore gas exploration near Aceh will be started by Exxon (ExxonMobil), as well as the resumption of the exploration of Block A in northern Aceh,” Kalla said during a ceremony to close Nusantara Day celebrations in Jakarta on Sunday.
Kalla was referring to the Blok A gas field, operated by PT Medco E&P Malaka, a subsidiary of Jakarta-listed PT Medco Energi International.
Medco owns 41.67 percent of the block while the remaining 41.66 percent and 16.67 percent belong to KrisEnergy and Japex, respectively. The gas field is currently under development and is expected to start production in early 2018.
Kalla did not detail ExxonMobil’s exploration plans but, in October, the US-based firm released its assets in Aceh to Pertamina. In the sales-purchase deal, which Pertamina said was a move to integrate its business, ExxonMobil released its 100 percent stake in Nort Sumatra Offshore (NSO), 100 percent stake in the B block and 30 percent stake in PT Arun Natural Gas Liquefaction (NGL).
NSO and the B block used to be the main sources of gas for convertion into liquefied natural gas (LNG) by Arun’s plant. However, as they have been depleted, the leftover gas is now being channeled to costumers via pipeline instead of being converted into LNG.
“ExxonMobil is committed to exploration in Indonesia. It still has exploration blocks which have yet to enter their operational stage,”the Energy and Mineral Resources Ministry;s oil and gas director general IGN Wiratmaja Puja said.
Wiratmaja added that oil and gas contractors operating in Aceh would continue working with the central government through the Upstream Oil and Gas Regulatory Spedial Task Force (SKKMigas) as a regional oil and gas regulator dedicated to Aceh (BPMA) had yet to be established. Setting up a BPMA is part of the implementation of regional autonomy law in the province.
“The (BPMA establishment) is ongoing and we are currently selecting who will be the BPMA chief. Contractors remain in communications with SKKMigas pending the BPMA establishment and operation,” Wiratmaja said.
Despite the current backdrop of falling oil prices, the government is still expecting that oil and contractors operating in Indonesia will extend their exploration activities to find new hydrocarbon reserves.
Recently, Indonesia’s membership in the Organization of Petroleum Exporting Countries (OPEC) was reactivated, even though it has been suffering from declining production, particularly oil output, as fields have been depleted due to exploitation in the past.
Companies low investment appetite, due to the low oil price and unfavorable regulations in Indonesia, have been predicted to further hurt the country’s production in the near future and its ability to meet growing demands for energy.
Apart from the oil and gas sector, Aceh is also expected to see more project to boost its economy after Energy and Mineral Resources Minister Sudirman Said announced that the region was among energy infra structure development models for the economic and maritime cluster.