Exploration Blocks Secured by SK Earthon and Partners in Indonesia
South Korea’s SK Earthon, the energy exploration and production (E&P) subsidiary of SK Innovation, along with Malaysia’s state-owned energy giant Petronas, have signed production-sharing contracts (PSCs) with Indonesia’s oil and gas regulatory body, SKK Migas, for two exploration blocks in Indonesian waters.
The Serpang and Binaiya blocks were secured through a competitive bidding process in the second round of the Indonesia Petroleum Bid Round 2024, organized by the Indonesian government.
Details of the Blocks
The Serpang block, covering around 8,498 square kilometers, is situated in one of Indonesia’s most promising hydrocarbon regions offshore in northeast Java. Petronas operates the block with a 51% stake, INPEX holds a 35% interest, and SK Earthon has a 14% stake.
On the other hand, the Binaiya block, spanning 8,484 square kilometers near the eastern coast of the Maluku Islands, is operated by Pertamina with a 56% stake, while SK Earthon and Petronas hold 22% interests each.
Work Commitments and Future Prospects
According to Petronas, the initial three-year work commitments for both PSCs include conducting geological and geophysical studies and acquiring 3D seismic data to identify drillable structures.
With these new awards, Petronas now holds 11 PSCs in Indonesia, further solidifying its presence in the region. The company aims to strengthen its oil portfolio and regional partnerships to meet the growing energy demand.
Expansion Strategies
For SK Earthon, the expansion into Indonesia marks a significant milestone in strengthening its presence in Southeast Asia. With operations in Vietnam, Malaysia, and now Indonesia, the company is focusing on developing its global E&P portfolio in key oil-producing regions.
SK Innovation, the parent company of SK Earthon, is exploring opportunities to expand its investments in the upstream sector in Indonesia, which is considered a resource-rich “land of opportunity” in Southeast Asia.
Future Endeavors
SK Earthon’s strategic clustering in Southeast Asia aims to unlock the full potential of resource-rich regions like Indonesia. By leveraging successful projects in Peru and Vietnam, the company is committed to developing Indonesia as a significant resource development region.
In Malaysia, SK Earthon operates the SK427 block offshore Sarawak, while in Vietnam, the company and its partners have made significant oil discoveries in the Cuu Long Basin, a prolific oil and gas producing region.