Malaysia’s national oil and gas company has expanded its portfolio in neighboring Indonesia by signing new production sharing contracts (PSCs) for areas offshore Eastern Java and Eastern Indonesia.
The Serpang PSC in East Java spans about 8,498 square kilometers (5,280.41 square miles) while the Binaiya PSC in Eastern Indonesia covers 8,484 square kilometers, according to a press release by Petroliam Nasional Bhd. (Petronas). The blocks were offered in the Southeast Asian country’s Petroleum Bidding Round 2024.
Petronas is operator in the Serpang license with a 51 percent stake. Japan’s INPEX Corp. owns 35 percent, while EO Serpang Pte. Ltd. holds the remaining 14 percent, according to a statement by INPEX.
Indonesia’ state-owned PT Pertamina (Persero) is operator in the Binaiya block with a 56 percent stake, while Petronas owns 22 percent. SK Earthon Co. Ltd. is the other owner, also holding 22 percent, according to the South Korean company.
“The signing of the Serpang and Binaiya blocks represents a pivotal step forward in PETRONAS’ enduring commitment to fortify our oil portfolio and regional partnership, in meeting the region’s energy demand”, Petronas said. “The Serpang block presents a crucial avenue to bolster our presence in East Java – an established, high-potential basin endowed with robust infrastructure enabling timely and efficient monetization of resources. Simultaneously, the Binaiya block opens a new frontier for PETRONAS to anchor a key hub in Eastern Indonesia, alongside our Bobara block”.
Petronas now holds 11 PSCs in Indonesia. It operates the Ketapang, North Ketapang and North Madura II blocks, located offshore East Java, as well as the Bobara block offshore West Papua. The company is also a co-venturer in five PSCs onshore and offshore East Indonesia, East Java, the Natuna Sea and Sumatra.
INPEX said it “expects that its upstream exploration activities in the Serpang Working Area will contribute to the expansion of its natural gas and LNG business”, noting the Serpang block is nearby discovered oil and gas fields.
The East Java region “is expected to generate stable energy demand in the medium to long term”, INPEX added. “INPEX and its partners anticipate an early transition to development and production activities in the event that exploration activities are successful”.
For SK Earthon, the PSCs complete its entry into “Southeast Asia’s ‘Big Three’ oil-producing nations”. SK Earthon was referring to Malaysia, Indonesia and Vietnam.
“This milestone completes the company’s strategic clustering map in the region, a key focus area for its global E&P [exploration and production] portfolio”, SK Earthon said.
Earlier this year SK Earthon made oil discoveries in Vietnam’s 15-1/05 and 15-2/17 blocks. These are in the Cuu Long Basin, which SK Earthon noted produces over 50 percent of Vietnam’s oil and gas. In Malaysia SK Earthon acquired operatorship of the SK427 block offshore Sarawak state in 2022.
Under the new Indonesian PSCs, the initial three-year work commitments include three geological and geophysical studies, as well as the acquisition and processing of 400 square kilometers of 3D seismic data, according to Petronas.
To contact the author, email jov.onsat@rigzone.com
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