Indonesia has agreed to team up with neighboring Papua New Guinea (PNG) to explore potential oil and gas reserves in border areas as the former shifts its oil and gas exploration focus to the eastern part of the archipelago.
Energy and Mineral Resources Minister Jero Wacik said after a meeting with PNG Public Enterprises and State Investment Minister Ben Micah on Tuesday that the two countries would work together by establishing joint operations to explore oil and gas reserves.
Indonesia’s Papua province, located in the eastern part of the nation, shares a 760-kilometer land border with PNG. The two nations currently have a few territorial disputes along the border, in areas with poor infrastructure.
“The border possesses a huge amount of unexplored oil and gas reserves, according to data obtained by our team. Economically, it would be easier to jointly explore these untapped resources,” Jero said in Jakarta.
“This is also important to maintain security along our border.”
Jero did not go into detail on which blocks the two countries planned to develop, but said they would also focus on building more infrastructure in border areas to support the energy and mining partnership.
Separately, Micah said his country also hoped its national petroleum companies would form a joint venture with oil and gas firm PT Pertamina to jointly develop hydrocarbon reserves in the areas.
PNG has two state-owned oil and gas firms, namely National Petroleum Company of Papua New Guinea (NPCP), which focuses on LNG and oil projects, and Petromin PNG Holdings Ltd., which
controls the nation’s petroleum and mining assets.
According to Micah, a number of major oil and gas companies, including France’s Total SA and Royal Dutch Shell, were currently exploring oil and gas resources in PNG. US-based ExxonMobil’s latest Asia Pacific liquefied natural gas (LNG) project is in New Guinea.
Pertamina CEO Karen Agustiawan, who was also present at Tuesday’s meeting, said her company would sign a joint study agreement with PNG’s national oil and gas company to develop resources. “We are also interested in entering PNG,” she said.
According to interim upstream watchdog SKKMigas, one of the blocks located near the Indonesia-PNG border is the Warim block, for which American oil and gas firm ConocoPhillips won the contract in 1989.
ConocoPhillips drilled six wells and spent US$98 million on exploration activities from 1990 to 1998 before the government declared the area a protected forest. SKKMigas exploration chief Nugrahani said in a text message on Tuesday that ConocoPhillips had been offered a contract renewal, which would enable the contractor to explore the Warim block for another five years.
“They will be given 15 years to exploit the block should they find profitable hydrocarbon reserves,” she said.
Indonesia, which left the Organization of Petroleum Exporting Countries (OPEC) in 2008, has set its sights on the eastern part of the archipelago for exploration following the maturation of major onshore oil and gas blocks in the western part.