Indonesia studying shale oil potentials

Indonesia is studying shale oil or non-conventional fuel to replace oil whose production is depleting.

The Drector General of Oil and Gas of the Ministry of Energy and Mineral Resources, Edy Hermantoro, said here on Wednesday that Indonesia would invite investors from home and abroad especially the United States to study shale oil potentials in the country.

"The US has successfully produced shale oil up to 700,000 barrels a day in North Dakota using `fracturing` technology," he said.

Besides shale oil the US has also successfully produced non-conventional gas or "shale gas" in a large amount, he added.

Edy hoped Indonesia would also be able to produce shale oil like other non-conventional gas such as coal bed methane (CBM).

He said the shale oil potentials in the country are estimated to be quite big, located among others in central part of Sumatra.

"Technically if gas has already surpassed "window" (its period) it will turn into liquid," he explained.

Edy said the government has already produced Energy and Mineral Resource Ministerial Decree Number 5 of 2012 to manage exploitation.

According to the regulation signed by Energy and Mineral Resources Minister Jero Wacik on January 31, 2012, non-conventional oil and gas that come from "reservoir" with low permeability include shale oil, shale gas, tight sand gas, CBM and methane hydrate which could be produced using the fracturing technology.

Right now non-conventional oil and gas sources that have been registered in Indonesia are CBM and shale gas.

The shale gas is estimated to reach 574 trillion cubic feet and CBM 453 trillion cubic feet.

The biggest non-conventional gas potentials are found in Sumatra and Kalimantan.

Indonesia has already produced CBM at 0.5 million cubic feet per day (MMSCFD) in the field in East Kalimantan managed by Vico Indonesia.

The government has set a target of increasing production in the field to 10 MMSCFD until the end of 2013.

Right now there have been 58 CBM cooperation contracts, he said.

Meanwhile the signing of the first cooperation contract for shale gas production with PT Pertamina (state-owned oil and gas firm) is scheduled to be done in the middle of May this year.

The location of the shale gas production field is in North Sumatra with its reserves reaching 15 trillion cubic feet (TCF).

Apart from that the government also plans to start the initial bidding for shale gas blocks in Central Kalimantan and Riau.

The government hopes the first production of shale gas in the fields could be started in 2018, he said.-Philippines News Agency