By Raymond Hendriawan

Abu Dhabi-based Mubadala Energy used the first quarter of 2026 to consolidate its position as a key upstream player in Indonesia, focusing almost entirely on the Andaman Sea offshore Aceh. During the period, the company moved closer to a final investment decision (FID) for its flagship South Andaman block, awarded multiple drilling and services contracts for the Tangkulo field, and secured a fifth block in the basin through Indonesia’s Second Bid Round 2025.

Mubadala entered the Andaman Basin on the basis of its geological potential of multi-trillion-cubic-feet resources and proceeded to validate that thesis through the landmark Layaran-1 and Tangkulo-1 discoveries. By Q1 2026, it had advanced from exploration success to development engineering and was laying the operational groundwork for first gas by the end of 2028. Indonesia's upstream oil and gas authority SKK Migas publicly disclosed the estimated US$1.95 billion investment figure for South Andaman's first development phase during a February 2026 parliamentary briefing, signalling the regulator's active engagement with the project.

Mubadala Energy's block portfolio in Indonesia

• South Andaman Block: Mubadala Energy South Andaman RSC Ltd. (80% interest). Gross split PSC. Hosts Layaran-1 (6-8 TCF gas in place) and Tangkulo-1 (>2 TCF gas in place) discoveries. FID targeted June 2026, first gas by the end of 2028.
• Central Andaman Block: Mubadala Energy (40%). Part of the contiguous Andaman Basin acreage position.
• Andaman I Block: Mubadala Energy (80%). Contiguous Andaman Basin acreage.
• Andaman II Block: Mubadala Energy (30%). Adjacent to the newly awarded Southwest Andaman block.
• Southwest Andaman Block: Mubadala Energy (currently 100%). Gross split PSC. Newly awarded on March 26, 2026, under Indonesia's Second Bid Round 2025. Extends the Bampo DHI play westward. First exploration well planned in years 4-6 of the PSC, following 3D seismic acquisition and interpretation.

South Andaman: Advancing toward FID in June 2026

The South Andaman block, operated by Mubadala Energy South Andaman RSC Ltd. with an 80% working interest, is the centrepiece of the company's Indonesia portfolio and the project that dominated its Q1 2026 operational agenda.

Mubadala Energy Indonesia’s portfolio (source: Offshore Engineer)

Tangkulo and Layaran potential

The South Andaman block hosts two deepwater gas discoveries of materially different scales, both of which underpin the first development phase. The Tangkulo-1 discovery, which forms the production base for the initial development, holds more than 2 trillion cubic feet of gas in place. Mubadala Energy has described the Tangkulo structure as directly overlying the proven Bampo DHI play, the same geological system that guided the company's exploration strategy across the Andaman Basin.

The Layaran-1 discovery is substantially larger, with estimated gas in place of approximately 6 to 8 trillion cubic feet, positioning it among Indonesia's most significant recent deepwater finds. SKK Migas has noted that the Layaran structure's scale offers meaningful long-term expansion potential beyond the first development phase, including options for additional production trains or export-oriented development schemes. While the first Plan of Development (PoD I) is anchored on Tangkulo, the Layaran resource provides a development optionality that distinguishes the South Andaman block from many of its regional peers.

FEED progress and engineering design

As of late Q1 2026, front-end engineering and design activities were progressing across all four major workstreams of the South Andaman development. SKK Migas Head Djoko Siswanto reported the following completion levels to Commission XII of the House of Representatives on February 11, 2026: the FPSO unit at 61.6%, the onshore receiving facility at 61.5%, subsea umbilicals, risers and flowlines at 46.3%, and the gas export pipeline at 32.3%.

The lower completion percentage for the gas export pipeline is consistent with its position later in the project's engineering sequence. Engineering, procurement, construction and installation activities for all major packages are scheduled to commence in the fourth quarter of 2026, subject to the June 2026 FID.

Investment estimate and regulatory engagement

SKK Migas's public disclosure of the US$1.95 billion investment estimate for South Andaman PoD I was a significant signal of the regulator's active stewardship of the project. The figure (with 2.3% annual cost escalation), provides a reference point for what the development will require in committed capital ahead of the FID.

The South Andaman project has been proposed for designation as a National Strategic Project under Indonesia's PSN framework, a classification administered by the National Development Planning Agency (Bappenas) that provides enhanced coordination and regulatory facilitation for large-scale infrastructure investments. The PoD is concurrently under review by the Mineral and Energy Resources Ministry.

"The award of the Southwest Andaman block is a testament to our team's technical conviction, expertise in deep water exploration, and growth mindset. We have an unrivalled understanding of the Andaman basin,” said Mansoor Mohamed Al Hamed, Managing Director and CEO, Mubadala Energy

Southwest Andaman: A fifth block and a basin-wide strategy

On March 26, 2026, the Indonesian government formally awarded Mubadala Energy the Southwest Andaman exploration block under a gross split production sharing contract. The award was made by the Directorate General of Oil and Gas as part of Indonesia's Second Bid Round 2025, with Mubadala Energy holding a 100% participating interest and operating the block.

Geological rationale

The Southwest Andaman block is situated immediately adjacent to Mubadala Energy's existing South Andaman, Central Andaman, and Andaman II acreage, forming what the company described as a natural continuation of the proven Bampo DHI play, the geological system that underpinned the Layaran-1 and Tangkulo-1 discoveries in the South Andaman block.

The award of Southwest Andaman was the culmination of a process that began with the identification of the opportunity in 2022, a Joint Study Agreement completed in November 2024, and a formal bid submission in November 2025. The timeline illustrates the early-mover mindset by entering blocks before competitive tension develops, completing subsurface work during the study phase, and converting that preparatory investment into bid success.

"This award marks another important chapter in our Andaman story and reflects the trust that the Indonesian government continues to place in Mubadala Energy as a long-term, committed partner. Southwest Andaman is a strategically significant addition to our core Andaman area, and we are excited about the prospectivity it brings,” said Abdulla Bu Ali, President Director of Mubadala Energy Indonesia.

Investment commitment and first exploration well

The firm commitment for the Southwest Andaman block is US$8.2 million, covering 3D seismic acquisition and subsurface studies. The first exploration well is planned for the second exploration phase, corresponding to years four to six of the PSC, and will be executed following completion and full interpretation of the new 3D seismic data. This sequencing mirrors the company's approach across its other Andaman blocks and reflects the deepwater frontier nature, where a well-calibrated subsurface evaluation is a prerequisite for efficient well placement.

Five blocks, one basin: Mubadala Energy's Andaman consolidation

The addition of Southwest Andaman completed a five-block basin position that Mubadala Energy had assembled in the Andaman Sea over the course of several years. The company now holds South Andaman, Central Andaman, Andaman I, Andaman II, and Southwest Andaman. Together, they solidify Mubadala Energy as the largest and most active explorer in the basin, with a portfolio of multi-TCF discovered resources and a growing inventory of high-quality exploration prospects.

The strategic logic of a contiguous, basin-wide position in a deepwater setting allows the operator to capture geological learnings across the full play fairway, share seismic data and subsurface models across adjacent blocks, spread infrastructure costs across a larger resource base, and sequence exploration and development activities to optimize capital deployment. In the Andaman context, the Bampo DHI play has been derisked through the Layaran and Tangkulo discoveries in South Andaman, and the expectation is that analogous structures exist across the adjacent blocks, which will be tested with the Southwest Andaman 3D seismic program.

Outlook: Mubadala Energy's position in Indonesia's gas future