Indonesia, PNG eye JV in gas, oil

Business, Normal

The National, Monday 27th May 2013

 INDONESIA and Papua New Guinea are planning joint exploration for potential oil and natural gas reserves in border areas.

Indonesian Energy and Mineral Resources Minister Jero Wacik was reported by The Jakarta Post saying: “The border possesses a huge amount of unexplored oil and gas reserves.”

He said this after a meeting with PNG’s Public Enterprises and State Investment Minister Ben Micah last week.

Wacik says: “Economically, it would be easier to jointly explore these untapped resources.”

He added that a joint effort was also important “to maintain security along the PNG-Indonesian border”.

The Indonesian province of Papua shares a 75km border with PNG.

Wacik did not specify which blocks the two countries plan to develop but said they would also improve much-needed infrastructure in border areas to support the partnership.

Indonesia’s oil and gas firm PT Pertamina chief executive Karen Agustiawan said “the company was interested in joint studies with PNG’s national oil company”.

UK consultancy Wood Mackenzie estimates PNG has 26 trillion cubic feet of natural gas.

Indonesia has gas reserves of 104.25 trillion cubic feet.

Formerly a net oil exporter in the Organisation of the Petroleum Exporting Countries (OPEC), Indonesia suspended its Opec membership in January 2009 to concentrate on meeting growing domestic demand.

But it has struggled to attract sufficient investment to meet growing domestic energy consumption because of inadequate infrastructure and a complex regulatory environment.

China last year offered nearly US$3 billion (K6.4 billion) in loans to PNG for infrastructure projects.

As reported by The Wall Street Journal, “China also signed a long-term deal to buy some of the country’s first exports of natural gas”.

Separately, Japan’s Osaka Gas announced last Wednesday that it had agreed to pay US$204 million (K440 million) to acquire stakes in natural gas assets in PNG owned by Horizon Oil Ltd. – The Jakarta Post