ESDM prepares rules to accelerate exploration of 67 frontier basins

The Ministry of Energy and Mineral Resources (ESDM) is preparing new rules to accelerate exploration in 67 frontier basins, or areas where exploration activity remains limited.

“Therefore, to accelerate exploration in the 67 frontier basins, the government will introduce new rules,” Ivan, coordinator for conventional oil and gas working-area development at the ministry’s Directorate General of Oil and Gas, said at the 51st ASEAN Council on Petroleum and Energy (ASCOPE) in Sanur, Denpasar, Bali, on Monday.

Ivan said the rules were still being drawn up, but assured that the requirements and terms for developing frontier basins would be more favourable than those under the current regulations.

He said the government was ready to adjust a number of investment requirements, including production-sharing arrangements, bonuses and firm commitments. Any changes would take account of the conditions and risk levels of individual working areas.

“Production-sharing arrangements, bonuses and firm commitments can be adjusted to the conditions in each area. However, the rules are still being drafted,” Ivan said.

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said Indonesia has 128 sedimentary basins, reflecting the country’s substantial upstream oil and gas potential.

Twenty basins are producing, while 41 have recorded oil and gas discoveries and remain at the exploration stage. The remaining 67 have not been explored.

To improve the prospects of oil and gas discoveries, the government is also promoting exploration through geological studies, seismic data acquisition and exploratory drilling.

According to figures presented by Ivan, about 14.5 per cent of exploration projects result in working areas progressing to production.

“That means one in seven exploration projects reaches production,” Ivan said.

To raise the rate at which exploration leads to production, Indonesia needs to conduct more exploration and obtain better data, Ivan said.

Improving the quality of subsurface data is one way to help investors identify the potential of oil and gas resources.