Executive Summary

Key insights and market outlook

Shell Plc is exploring opportunities in Indonesia's oil and gas sector through five new work areas including offshore locations in Bali and NTB, and onshore areas in West Sulawesi ²

. The exploration is being conducted through a joint study with Kuwait Foreign Petroleum Exploration Company (Kufpec) ¹. This development follows SKK Migas' suggestion to potentially use revenue from upstream oil and gas sector for further exploration activities, a strategy successfully implemented by countries like Malaysia and the UK ³.

Full Analysis

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Deep Dive Analysis

Shell Explores New Oil and Gas Opportunities in Indonesia

Strategic Expansion Across Multiple Regions

Shell Plc is making significant strides in Indonesia's oil and gas sector by exploring opportunities across five new work areas ²

. The British energy giant is conducting these explorations in collaboration with Kuwait Foreign Petroleum Exploration Company (Kufpec) through a joint study ¹. The areas under consideration include three offshore locations in Bali and Nusa Tenggara Barat (NTB), and two onshore locations in West Sulawesi ².

Regional Focus and Exploration Strategy

The selection of these regions indicates Shell's strategic approach to Indonesia's diverse geological potential. The company's exploration efforts are focused on both mature and emerging areas, demonstrating a comprehensive strategy to identify new hydrocarbon resources. According to Djoko Siswanto, Head of SKK Migas, the exact details of the work areas are still under review ¹

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Funding Exploration Activities

The development comes as SKK Migas suggests using revenue from the upstream oil and gas sector to fund further exploration activities ³

. Currently, the exploration budget stands at approximately US$1 billion, which is considered limited by industry standards ³. Djoko Siswanto pointed out that countries like Malaysia and the UK have successfully implemented similar strategies to boost their oil and gas production ³.

Implications for Indonesia's Energy Sector

This move by Shell signals confidence in Indonesia's oil and gas potential and could lead to increased investment in the sector. The collaboration with Kufpec adds international expertise to the exploration efforts, potentially enhancing the chances of discovering new reserves. As Indonesia continues to seek ways to maintain and grow its energy production, such investments are crucial for the country's energy security and economic development.

References