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Indonesia govt fears falling oil price may further slow down CBM, shale gas exploration

JAKARTA (Rambu Energy) – The Indonesian government’s drive to boost explorations of coal bed methane (CBM) and shale gas could further slow down due to a decline of global crude oil price.

So far, the government has awarded 54 CBM working areas (WK) and only half of those WKs that are being explored.

Acting Director General for Oil and Gas at the Energy and Mineral Resources Ministry (ESDM) Naryanto Wagimin said that if the oil price stays low for long period, it could create a new problem in the development of non-conventional oil and gas development. Investors, he said, he rethink their strategy in investing in this sector.

In order to address this problem, the government considers offering new ‘incentives’ for non-conventional oil and gas explorations, including changing the terms of the contract and simplifying investment procedures.

Indonesia’s CBM reserves are estimated to reach 453 trillion cubic feet (tcf). The high prospective CBM reserves are located in South Sumatera (183 TCF), Barito (101.6 TCF), Kutai in East Kalimantan (89.4 TCF) and Central Sumatera (52.5 TCF), the energy ministry says. The medium CBM reserves are located in North Tarakan basin (17.5 TCF), Berau (8.4 TCF), Ombilin (0.5 TCF), Pasir/Asam-Asam (3.0 TCF) and Jatibarang (0.8 TCF). Meanwhile low prospective CBM reserves are located in Sulawesi (2.0 TCF) and Bengkulu (3.6 TCF). (*)

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