Jakarta, IndonesiaSentinel — Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has officially approved the Development Plan for the Geng North Field within the North Ganal Working Area and the Gehem Field in the Ganal and Rapak Working Areas. All part of the North Hub Development Project in the Makassar Strait. This approval, formalized in Minister Bahlil Lahadalia
No. T-351/MG.04/MEM.M/2024, responds to a recommendation from the Head of SKK Migas, detailed in their letter No. SRT-0318/SKKIA0000/2024/S1. The oil and gas blocks involved are located in East Kalimantan.
Hudi D. Suryodipuro, Head of SKK Migas’s Program and Communications Division, described the approval as a significant milestone, especially as the project is designated as a National Strategic Project (PSN) in the upstream oil and gas sector.
“This approval serves as the best gift for Indonesia’s 79th Independence Day and solidifies the role of the upstream oil and gas industry as a key contributor to achieving energy security for a developed Indonesia by 2045,” Hudi stated in a written release on August 23, 2024.
The approval process was remarkably swift, with the Plan of Development (POD) granted just 10 months after the discovery of the Geng North giant field in October 2023. Hudi highlighted this quick turnaround as part of broader efforts to increase oil and gas production by converting resources into production.
Hudi emphasized that SKK Migas’s expedited efforts align with President Joko Widodo’s directive to accelerate bureaucratic reforms, particularly in the upstream oil and gas industry. “The approval of the POD for the Geng North and Gehem Fields is expected to boost investment in the sector, as both the government and SKK Migas continue striving to enhance the competitiveness of upstream oil and gas investments in Indonesia,”
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The approved development plan is set to attract a significant investment into Indonesia, with an estimated capital expenditure (excluding sunk costs) of $11.847 billion and operational costs (including ASR, VAT, and property taxes) amounting to $5.643 billion. This totals approximately $17.49 billion, or roughly IDR 280 trillion at the current exchange rate of IDR 16,000 per USD.
Additionally, the total sunk cost for the North Ganal and Rapak Working Areas is set at $859 million.
“This IDR 280 trillion investment is substantial, more than 2.5 times the cost of the Jakarta-Bandung high-speed rail project, which is around IDR 112 trillion,” Hudi noted with pride.
(Agung)
