JAKARTA: Indonesia has announced a major gas discovery off the east coast of Borneo, a find the government says will strengthen the nation’s energy security as the war in the Middle East forces countries to rethink dependence on imported fossil fuels.
Preliminary estimates point to around 5 trillion cubic feet of gas and 300 million barrels of oil-equivalent condensate in the Geliga-1 well, some 70 km off the coast of East Kalimantan province, the Ministry of Energy and Mineral Resources said in a statement.
The discovery was made by Italian energy group Eni, which has conducted various exploration campaigns in Indonesia since its operations began in the country in 2001.
“This is something extraordinary. This is giant,” Energy and Mineral Resources Minister Bahlil Lahadalia said at a press conference in Jakarta.
“This is part of our strategy, where we no longer import gas from other countries, as we must fulfill our own domestic needs … and secondly, it will reduce our crude imports with the additional production of condensate of around 90,000 to 150,000 barrels by 2030.”
The discovery was “important” in a global era where “almost everyone is now protecting their reserves,” he added.
Like other countries, Indonesia has come under pressure from soaring global energy prices since the US-Israeli attacks on Iran on Feb. 28 led to the closure of the Strait of Hormuz, through which most of Asia’s energy supply transits.
Southeast Asia’s biggest economy imports around 60 percent of its fuel needs, with about 20 percent of its imported oil and LPG sourced from the Middle East.
“We know that the uncertain geopolitical conditions of the world, tensions in the Middle East and the closure of the Strait of Hormuz are having an impact on economic dynamics that are pointed to energy security in each country,” Lahadalia said.
“To reach energy self-sufficiency, we must be able to fulfill our needs with domestic supply by utilizing the reserves in our country.”
The government estimates that Eni’s peak production could reach up to 2,000 million standard cubic feet per day by 2028 and increase to 3,000 MMSCFD by 2030, up from between 600 and 700 MMSCFD today.
If an estimated 2,000 MMSCFD were supplied to the electricity grid, it would potentially be enough to power 30 million homes during peak production, said Iwa Garniwa, rector of the PLN Institute of Technology.
The potential production from the new reservoir will also protect Indonesia from global supply disruptions in the future.
“(It gives Indonesia) geopolitical bargaining power. Indonesia doesn’t need to panic and fight over gas cargo. We can focus on maintaining domestic supply first, then export the remainder,” Garniwa told Arab News.
Indonesia will likely get between 30 to 50 percent of produced gas under its production sharing agreement with Eni. This comes on top of the share it receives under the domestic market obligation policy, which mandates resource companies like Eni to supply at least 25 percent of their annual production to the domestic market.
Indonesia had 33.8 trillion cubic feet in proven gas reserves in 2024, according to data published by the US Energy Information Administration.
“This finding is one of the biggest discoveries in the last five years,” Garniwa said.
“It increases national gas reserves at a time when many mature fields are decreasing production (while increasing) state revenue from production sharing, taxes, oil and gas non-tax state revenues for the next 20 to 30 years.”
