Indonesia Launches 2025 Oil and Gas Block Auction with Attractive Terms

Enhanced Production Sharing Contracts

The Indonesian government has announced the 2025 oil and gas block auction, offering eight potential blocks while simultaneously revealing the winner for the WK Gagah block through the Direct Offer Phase II 2025. The Ministry of Energy and Mineral Resources has significantly improved the production sharing contract terms to attract investors. Key enhancements include:

• Up to 50% split for contractors based on risk profile
• 100% Indonesian Crude Price (ICP) for Domestic Market Obligation (DMO)
• No cost recovery limitations
• Choice between cost recovery or gross split scheme

These improvements aim to make projects more economically viable for investors while maintaining government revenue streams. The flexibility in contract terms is expected to attract both local and international oil companies.

Attractive Blocks on Offer

The 2025 auction includes eight potential blocks, with three particularly noteworthy blocks offered through Direct Offer:

1. WK Tapah (South Sumatra & Jambi Onshore): Estimated resources of 439.5 MMSTB oil and 23 BSCF gas
2. WK Nawasena (East Java Onshore & Offshore): Estimated resources of 1.313 BCF gas
3. WK Mabelo (Southeast Sulawesi Onshore & Offshore): Estimated resources of 282 MMSTB oil

These blocks represent significant exploration and production opportunities, particularly in proven hydrocarbon basins. The varied locations and resource types are designed to appeal to different investor interests and risk appetites.

Strategic Importance

The 2025 oil and gas block auction is a crucial part of Indonesia's energy strategy, aiming to maintain and grow domestic production. The improved contract terms reflect the government's understanding of current industry challenges and investor needs. Successful exploration and development of these blocks will contribute significantly to Indonesia's energy security and economic development.