Oil and Gas Contractors in West Papua Encouraged to Accelerate Production

TELUK BINTUNI, KOMPAS - Minister of Energy and Mineral Resources Bahlil Lahadalia monitored several Contractors of the Cooperation Contract for oil and natural gas production in West Papua Province. In accordance with the directive from President Prabowo Subianto, oil and natural gas production is expected to be continuously boosted to address the energy deficit in the country.

During his visit on Wednesday (11/6/2025), Bahlil visited the work area of the Contract of Work Contractor in Teluk Bintuni Regency, namely Asap Kido Merah operated by Genting Oil Kasuri Pte Ltd (GOKPL) and Tangguh LNG (Liquefied Natural Gas) owned by Bp Indonesia.

"This is being done to ensure the government's program regarding energy self-sufficiency and downstream processing," said Bahlil after touring the Tangguh LNG project site with officials from various ministries, agencies, and related companies.

He stated that during his visit to the working area of GOKPL, five gas wells had been opened. Four of them have been 100 percent explored. These gas wells are targeted to produce approximately 300 million standard cubic feet per day (MMSCFD).

The commercialization of gas, expected to commence in 2026, will be supported by a floating LNG facility (FLNG). This facility is designed to accommodate, process, and store LNG offshore. The construction of the FLNG has reached 53 percent completion. This facility will be the largest in Indonesia and the seventh largest in the world.

Bahlil also monitored the development of gas production at Tangguh LNG after the start of operations of the LNG Train 3 processing facility in November 2023 and the finalization of the investment in the Tangguh Ubadari carbon capture storage (CCS) project in November 2024.

The latest project that has begun work on the British contractor with a target of operation in 2023 is expected to help increase the production of gas for electricity generation. "We know that one-third of the total gas production in Indonesia is supplied by Tangguh LNG. Therefore, we must continue to maintain lifting and its stability," said Bahlil.

During his journey across the "Bird's Head" region of Papua, Bahlil also highlighted the Mogoi oil and gas field owned by Pertamina in collaboration with PT Petro Papua Mogoi Wasian. He warned about the production activities there that have yet to commence.

If the construction work can be completed within a year, the block is expected to produce gas amounting to 40 MMSCFD. Bahlil has also threatened to revoke the construction permit if the block is not developed promptly.

Bahlil is optimistic that the oil and gas production target set in the State Budget (APBN) 2025 can be achieved soon. Previously, he reported that the realization of oil production by the first quarter of 2025 had reached 580,000 barrels per day, or 96 percent of the APBN target of 605,000 barrels per day.

The domestic demand for gas is projected to continue increasing. With this estimate, he considers that LNG producers should prioritize sales to the domestic market.

The gas production during the same period has exceeded the annual target, reaching 120 percent (1.206 million barrels of oil equivalent per day) of the target of 1.005 million barrels of oil equivalent per day.

The realization of oil production is also expected to soon exceed the APBN 2025 target following the inauguration of oil production in the Cepu Block, Central Java, managed by ExxonMobil. This block is targeted to produce an additional maximum of 30,000 barrels per day from the existing production of approximately 160,000 barrels per day. The inauguration of ExxonMobil's Cepu Block production, according to Bahlil, will be conducted directly by President Prabowo Subianto in July or August 2025.

Nevertheless, the state budget target for oil and gas production does not reflect the actual domestic needs. Currently, the availability of oil for domestic use is still in deficit by 1 million barrels per day.

Meanwhile, domestic gas demand in 2024 is projected to reach 3,881 BBTUD or 66 percent, higher than the amount of gas utilized for export. Domestic gas demand has exceeded export needs for nearly the last 10 years.

Bahlil said that domestic gas needs are projected to continue to increase. With this estimate, he considered that LNG gas producers should prioritize domestic sales. "There are parts that we should export to fulfill contracts with buyers and parts that we cut. This is all in order to realize what is the government's program," he said.

Nevertheless, Bahlil believes that this consideration risks diminishing investor confidence, which is generally already contracted with foreign buyers. "Therefore, we are now optimizing all potential that can enhance our oil production," he stated.

In response to the government's expectations, Head of Country Bp Indonesia, Hardi Hanafiah, stated that they have not reduced their gas export supply. This is because the LNG purchase contracts are quite complex to amend.

To support domestic needs, the strategy that can be implemented is to re-identify contracts whose delivery times can be changed.

"There are those we can (invite to) discuss, is this still necessary? If it is not necessary, we can postpone it to next year, or if it is still not necessary, we can reduce our commitments. Therefore, it should not come to sacrificing the buyers," he stated.

Nevertheless, Bp Indonesia still supplies approximately 30 percent of the total production of 11.4 million tons per year (mtpa) of LNG for domestic needs. Tangguh LNG also continues to supply gas to PLN, accounting for 75 percent of the production from Train 3. Since commencing operations in 2009, Bp Indonesia has recorded the delivery of 1,800 cargoes (equivalent to a volume of 4.6 billion MMBtu) of gas to buyers in Indonesia and Asia.