Govt offers two shale gas blocks to investors

The government is planning to offer two shale gas blocks to investors in a direct bid, expected to be held by the end of this year, media reports said Tuesday.

Director for Upstream Oil and Gas at the Ministry of Energy and Mineral Resources Hendra Fadly said the two blocks include the Kisaran block in North Sumatra, and West Tanjung in South Kalimantan.

?They [Kisaran and West Tanjung] are located in the conventional natural gas field. We, however, estimate that the two blocks have shale gas reserves,? he said on Monday as quoted by The Jakarta Post. According to him, potential investors could soon join the auction.

Hendra said the ministry would need around three months to finalize its assessment of the two shale gas blocks that would be offered through direct bids. Potential investors are currently conducting joint studies before moving further in the tender process.

Meanwhile, the Director General of Oil and Gas, Edy Hermantoro, said the government would award up to eight shale gas production-sharing contracts (PSCs) this year to Pertamina and private oil and gas firms, Bisnis Indonesia daily reported.

Last year, the Energy and Mineral Resources Ministry estimated the shale gas resources in the country Sumatra, Kalimantan, Papua and Java to reach around 574 trillion cubic feet (tcf).

Shale gas resources in the country, according to the ministry?s data, surpass unconventional coal bed methane (CBM) potential resources of around 453.3 tcf and conventional natural gas of around 153 tcf.

Sumatra supposedly had the largest shale gas reserves of around 233 tcf, particularly in the central region, where approximately 86.9 tcf of shale gas resources could he found, according to the ministry?s geological bureau.

Kalimantan had an estimated 194 tcf of shale gas reserves, the ministry said, followed .by Papua Island (90 tcf) and Java Island (48 tcf), while the remaining 9 tcf was spread across other parts of the archipelago. (*)