Malaysia’s Petronas eyes more acreage off Indonesia’s Aceh in exploration hotspot

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Malaysia’s national oil company Petronas is considering acquiring new upstream acreage off Indonesia’s Aceh province as it seeks to develop more gas projects in the Southeast Asian country. Significantly, more incentives should be offered to encourage investment in exploration.

The Aceh Upstream Oil and Gas Management Agency (BPMA) announced at the end of August that Petronas Carigali was carrying out studies on the Seuramoe block. The Indonesian company Aceh Energy has also studied the potential of the Bireun-Sigli block, which has been declared a work area.

Petronas is expected to complete its study by the end of this year and the government is expected to auction the blocks under the director’s bid mechanism, Petromindo reported. Under this mechanism, Petronas and Aceh Energy will have the first right to explore the respective blocks.

Harbor Energy (LON:HBR) the recent discovery of gas at the Timpan-1 exploration well in its Andaman II block offshore Aceh has revived interest in the region. The discovery is located in a structure stretching from Aceh to the Andaman Sea, an offshore region that houses the platforms that powered the former six-train liquefied natural gas (LNG) export complex. ExxonMobil which propelled Indonesia into the global LNG trade in the early days. 1970s.

The Spanish Repsol (BME:REPRESENTING) and its partner Petronas are currently drilling a deepwater well in Andaman Block III, adjacent to the area operated by the port.

A series of successful gas discoveries could potentially be incorporated into a joint development to improve project economics.

BPMA says several international oil and gas companies have shown interest in developing oil and gas fields off Aceh, particularly following Harbor Energy’s initial exploration success.

However, it should be noted that Harbor warned that “permeability was below expectations” in its Timpan-1 deepwater exploration well offshore Indonesia in the North Sumatra Basin. Still, the initial result bodes well for the border area and could open up more oil areas, which would be gas-prone.

The BPMA is offering extended exploration conditions as well as tax exemptions to make exploration more attractive offshore Aceh. The Indonesian government has also improved the distribution of profits between the government and investors. The share will be risk-adjusted – the higher the risk, the more investors will get.

Petronas participated in Repsol’s Andaman III deepwater production sharing contract offshore Aceh, Indonesia in December 2019. Petronas in Indonesia and demonstrates our commitment to supporting the development of the oil and gas industry in Indonesia.

“Petronas and Repsol are committed to working with the Aceh Oil and Gas Management Agency and the Indonesian government to further develop the oil and gas industry in Aceh,” Petronas said.

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