Indonesia to Auction Two Shale Blocks

Indonesian government is planning to offer two shale gas blocks for auction by the end of this year.

According to Jakarta Post, Energy and Mineral Resources Ministry is evaluating the two blocks, Kisaran in North Sumatra and West Tanjung in South Kalimantan, before putting them up for auction.

Meanwhile, the government would award up to eight shale gas production-sharing contracts (PSCs) this year to Pertamina and private oil and gas firms, including foreign players, Jakarta Post added.

Last year, the Energy and Mineral Resources Ministry estimated the shale gas resources in the country — Sumatra, Kalimantan, Papua and Java — to reach around 574 trillion cubic feet (tcf).

Despite country's potential Indonesia may face challenges in developing its shale resources due to lack of technology, land acquisition problems and overlapping permits.