Indonesia to tender new oil & gas blocks, reduce LPG imports

Indonesia aims to tender all 60 oil and gas working areas by 2027 to increase oil lifting and support energy security, said its Energy and Mineral Resources Minister Bahlil Lahadalia.

Bahlil said that there are around 60 oil and gas working areas that Indonesia will tender until 2028. All the tendered areas will be new blocks.

Newly-appointed director general of oil and gas Achmad Muchtasyar was assigned to evaluate the working area that has received approval for the Plan of Development (PoD) but has yet to commence production despite the lengthy 20-year period.

Bahlil also called for a regulation governing oil and gas exports and imports to support the country’s commodity balance as directed by President Prabowo Subianto towards achieving energy sovereignty.

The Ministry of Energy and Mineral Resources aims for oil lifting to reach around 800,000 - 900,000 barrels per day by 2029.

Meanwhile, Bahlil, who is also head of the task force for the acceleration of downstreaming and national energy security, has emphasized the importance of developing the domestic liquefied petroleum gas (LPG) industry to cut imports.

He said Indonesia needs to build the LPG industry by utilizing C3 (propane) and C4 (butane) gas, and also needs to push for household gas networks to meet people's needs.

The domestic consumption of LPG in Indonesia is around 8 million tons per year. Meanwhile, the industry produces just 1.4 million tons of LPG per year. Thus, Indonesia has to import around 6 million to 7 million tons of LPG every year.

Therefore, the country needs to accelerate efforts to reduce LPG imports to maintain the economic balance and narrow the deficit in its trade balance and foreign exchange.

Currently, Indonesia is spending significant foreign exchange on LPG imports, with around IDR 450 trillion (over $28.1 billion) spent each year to purchase oil and gas, including LPG.