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Indonesia

According to the Geological Agency of the Ministry of Energy and Mineral Resources, Indonesia has shale gas proven resources of 574.07 trillion cubic feet (tcf) distributed as follows: . Sumatra Island has 233.05 tcf resources, Kalimantan Island has 193.93 tcf, Papua Island has 94.04 tcf, Java Island has 47.64 tcf, and Sulawesi Island has 5.41 tcf proven resources. In Sumatra Island, the proven shale gas reserves are in the North Sumatera province, Central Sumatra, Ombilin, and South Sumatra. Proven shale gas reserves also found in the north-west and also north-east of Java Island. In Kalimantan Island, the proven reserves are in Barito, Kutei, Tarakan, Melawi, and Ketungau. Whereas in Sulawesi Island, there is only one proven reserve, which is in Sengkang. Lastly, in Papua Island, the reserves are found in Akimeugah and Bintuni. All of the area mentioned above are proven resources of the shale gas in Indonesia. Until 2012, Indonesia has not develop shale gas yet. At 547 tcf, the potential reserve of Indonesia shale gas is more significant than either coal bed methane (CBM) or conventional natural gas, with 453 tcf and 334 tcf, respectively.

To ease the advancement of shale gas and bolster exploration both offshore and onshore, the Indonesian government has established new regulations to reduce the cost of development of shale gas. The government hopes that these new regulations will attract international as well as national investments. The vital part of this new regulation is that the government now treats shale oil and gas as oil and natural gas. The government also acknowledges the fracking technology, which makes shale gas exploration possible.

Even though Indonesia has abundant resources of shale gas, there are some challenges in its development. First, there is a concern that fracking technology could affect the water system in the certain area. Advance and better technology must be applied if the developer wants to exploit the shale gas. Other challenges such as poor local governance, lack of incentives for investors, and insufficient infrastructure must also be addressed. One of the pioneers of shale gas in Indonesia is Lion Energy. This Australian company is focused on developing shale gas in Sumatra island. The shale boom that happened in the United States inspired the Lion Energy to push the development of shale gas in Indonesia. ”