Korea's POSCO International to develop Indonesian gas block

POSCO International, a South Korean company, signed a contract with Pertamina Hulu Energi (PHE), a subsidiary of Indonesia's state-run oil and gas corporation Pertamina, and the Indonesian government for the development of the Bunga gas block in Indonesia, it said on July 25.

The Bunga block is situated in the eastern sea of Java Island and covers an area of 8,500 km². It is believed to hold significant potential for successful exploration, sharing similar characteristics with the nearby Pagerungan gas field, known for its large-scale natural gas production, POSCO International said. The estimated reserves of natural gas in the Bunga block amount to around 1.3bn barrels.

As part of the contract, POSCO International is guaranteed a six-year exploration period and a 30-year development and production period for the Bunga block. The sharing ratio for the project is set at 60:40 for oil and 55:44 for gas, divided between the Indonesian government and the two companies involved, POSCO International and PHE. Both POSCO International and PHE will hold a 50:50 stake in the project.

POSCO International has plans for 3D artificial seismic wave exploration by 2026 to further assess the potential of the Bunga block. Exploration drilling is scheduled for 2027. The Korean company will act as the operator of the project, overseeing its development and production activities.