Petronas Plans “Aggressive” Expansion With New Hub in Indonesia
(Reuters) - Malaysian state energy firm Petronas plans an "aggressive" expansion in Indonesia that will see it create a hub for its operations in East Java and invest in exploration in the country's far-flung eastern regions, its Indonesia head said on Monday.
Indonesian President Prabowo Subianto's government, which took office this month, has pledged to bolster energy development, aiming to reverse a decades-long decline in output by the former OPEC member.
Yuzaini Md Yusof, head of Petronas in Indonesia, said the company was encouraged by recent regulatory steps that made it easier to develop energy projects.
Petronas operates four oil and gas blocks in Indonesia — three of them in East Java region, in the western part of the archipelago — and has participating interests in several others.
It plans to create a hub for the three operations in East Java by linking their production facilities and integrating logistic facilities, he said.
"Our first strategy is to grow bigger in the East Java area," Yusof told Reuters, without sharing investment figures. "And the next long-term plan is for us to expand our business portfolio in eastern Indonesia."
East Java is expected to benefit from a pipeline project due to be completed in December 2025 that will connect supply from the eastern side of the island to demand in the densely populated western part, and Petronas wants to expand its business there.
Its North Ketapang block is in the exploration phase, while Hidayah field in North Madura II block is expected to produce the first oil by 2027. Petronas is also developing a new gas field in Ketapang block.
"With that connection of this infrastructure project, it has created attractiveness for the operators and companies that are working in the East Java area," Yusof said.
In eastern Indonesia, Petronas has a 15% interest in the Masela gas project, and this year the company signed a production sharing contract for the Bobara Block offshore West Papua.
Bobara, which the government estimates contains 6.8 billion barrels of oil equivalent, will be Petronas' first deep-water project in Indonesia as operator. Petronas is exploring the potential to bring in a partner for the block, Yusof said.
"These two block acquisitions reaffirm our commitment to unlocking the potential in the eastern Indonesia area, where most of that area is frontier, which is very high risk and not many operators have gone through," Yusof said.
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