Unlocking Indonesia’s Hidden Energy Treasures: The Future of Oil and Gas Exploration

Oil prices have long been a key driver of economic trends around the world. As the primary source of energy for many industries and households, fluctuations in oil prices can have far-reaching effects on both advanced and developing economies. From transportation costs to inflation and industrial production, oil prices impact nearly every sector of the global economy. Given oil's status as a high-demand global commodity, significant price fluctuations can have profound economic consequences. Oil prices are determined by a mix of supply and demand, production costs, and market sentiment. Supply and demand are influenced by the oil futures market, where contracts are made to buy or sell oil at a specific price on a future date. The cost of extraction also affects prices—easily accessible oil is cheaper to produce, while complex methods like deep-sea drilling require costly technology, pushing prices higher. Lastly, market sentiment plays a role, as speculation about future demand can drive up prices when traders buy oil futures contracts in anticipation of future shortages or increased demand.In 2020, the demand for oil plugged during the pandemic, with lockdown causing the price to fall below zero for the first time in history to a sharp downturn in economic activity. Since then, oil prices have surged to nearly $100 per barrel, driven by strong economic recovery post-lockdown. As the economy grows, so does the demand for oil. Oil accounts for approximately 3% of global GDP and is one of the most important commodities worldwide.Source : world economic forumAn increase in oil prices affects not only gasoline cost but also virtually all goods and services. Oil serves as both a feedstock and source of energy and is integral to transportation across industries. When oil prices rise, energy is integral to transportation across industries. When oil prices ries, energy bills increase, and these costs are passed on to consumers through higher prices for goods and services. This often leads to inflation, as the cost of living rises and the purchasing power of consumers declines. For many countries, oil and gas revenues are central to their economic stability. Nations that are major exporters, such as Saudi Arabia and Russia, rely heavily on income from these resources to fund government spending, infrastructure projects, and social programs. When oil prices plummet, these countries face budget deficits, currency devaluations, and economic downturns. On the other hand, oil-importing nations, particularly in the developing world, struggle with rising import costs when prices increase, worsening trade deficits and slowing economic growth. The global dependence on oil and gas keeps national economies vulnerable to market shiftsThe oil and gas industry plays a critical role in global supply chains, especially in sectors like transportation, manufacturing, and agriculture. Rising oil and gas prices can disrupt supply chains by increasing the cost of raw materials, transportation, and energy-intensive production processes. For instance, the shipping industry, which relies on oil-based fuels, faces higher operational costs, which are then passed on to consumers. These disruptions can cause delays in the availability of goods, increase the prices of everyday items, and slow down global trade, impacting economies worldwide.Written by : Fairuz Nabila DaniputriReferences :World Economic Forum, 2022. *Why oil prices matter to the global economy: An expert explains*. World Economic Forum. Available at: [Accessed 16 September 2024].U.S. Energy Information Administration, 2022. *Indonesia – International analysis*. U.S. Energy Information Administration. Available at: [Accessed 16 September 2024].McKinsey & Company, 2020. *Oil and gas after COVID-19: The day of reckoning or a new age of opportunity?* McKinsey & Company. Available at: [Accessed 16 September 2024].

Surabaya, SPE ITS SC - Indonesia’s upstream oil and gas regulator, SKK Migas, has issued a formal warning to Inpex, Japan’s largest oil and gas exploration and production company, has been operating in Indonesia for decades. Through its subsidiary Inpex has yet to begin gas production, prompting growing frustration from Indonesian authorities.  According to SKK Migas, the regulator is applying pressure through both formal warnings and the threat of regulatory action, including the possibility of revoking the concession if significant progress is not achieved. The move reflects Indonesia’s broader push to accelerate upstream projects to meet rising domestic demand and strengthen its role in the global LNG market. Industry observers note that the Masela project could be a game-changer for Indonesia’s gas sector, but only if development is expedited. The government’s warning underscores the urgency: after more than two decades since its discovery, the Masela Block remains untapped.  Writer: Christya Amanda

For centuries, humanity has looked outward to the stars, the moon and the planets. Yet there is a profound mystery that lies much closer, beneath our very feet: the Earth core. The kola borehole, or known as the Kola Project, represents one of humanity’s boldest attempts to reach the depths of our planet, uncovering secrets hidden beneath the surface.The Kola Project began in 1970 as part of the Soviet Union’s ambitious scientific endeavors. Situated on the remote Kola Peninsula in northern Russia, the project aimed to drill as deep as possible into the earth crust. The ultimate goal was to explore the composition of the earth's interior, understand its physical and chemical properties, and perhaps uncover its formation billions of years ago. Over two decades, the kola borehole reached an unprecedented depth of 12,226 meters (about 40,230 feet) in 1989, making it the deepest artificial point on earth. This incredible feat surpassed previous drilling records and remains unchallenged to this day. Despite the immense depth, the borehole only penetrated unchallenged to this day. Despite the immense depth, the borehole only penetrated about a third of the Earth’s crust, highlighting the vast scale of our planet layers. Drilling to such extraordinary depths posed numerous technical and scientific challenges. Temperatures exceeded 180°C (356°F), far higher than anticipated, making equipment prone to failure. The immense pressure of the drilling process. Despite these obstacles, the kola project provided invaluable insights into the earth’s geology. Among the project’s most significant findings were the unexpected presence of water at extreme depths and the discovery of microscopic fossils in ancient rock formations. These fossils, found more than 6 kilometers below the surface, suggested that life might have existed in environments previously considered inhospitable. Additionally, researchers gathered critical dara on seismic activity, the composition of the earth’s crust and thermal gradients. As technology advances, exploring Earth’s depths remains a compelling dream. Future drilling and robotic technologies could unlock further insights into Earth's history, tectonics, and vital resources. The Kola Project demonstrates that exploration extends to the unseen depths of our planet, reaffirming humanity's drive to uncover its mysteries

Indonesia recorded a significant upstream milestone after Eni announced a giant gas discovery at the Geliga-1 exploration well in the Ganal Block, offshore East Kalimantan. The find holds an estimated 5 trillion cubic feet (Tcf) of gas and around 300 million barrels of condensate, making it one of the more consequential discoveries in the region in recent years.The well was drilled to roughly 5,100 meters in water depths of about 2,000 meters, approximately 70 kilometers from shore. Drilling encountered a substantial gas column within Miocene formations with strong petrophysical properties, a result that speaks to the quality of the reservoir even under technically demanding conditions.Geliga-1 is the latest in a string of exploration successes Eni has logged in the Kutei Basin, following Geng North in 2023 and Konta-1 in 2025. Taken together, these findings steadily reinforce the basin's standing as one of Indonesia's most promising gas provinces, with resource potential that scales across multiple structures.On the development side, Eni has already taken Final Investment Decisions (FID) for the South Hub and North Hub projects, both expected to come online around 2028. At full capacity, the two hubs are projected to produce up to 2 billion cubic feet per day (Bcfd) of gas alongside 90,000 barrels of condensate per day. The development will rely on subsea systems and FPSO infrastructure, tied into existing facilities at the Bontang LNG plant.The location of Geliga-1 also draws attention to the nearby Gula discovery, estimated at around 2 Tcf. Early assessments suggest that combining resources from both fields could add roughly 1 Bcfd of gas output and support the formation of a third production hub in the basin, sharing infrastructure and cutting time to market.To close the loop on the downstream side, Eni is looking at options to expand liquefaction capacity at Bontang. The rationale is straightforward: leverage what is already there, keep capital spending in check, and extend the working life of one of Indonesia's principal LNG export facilities.The Ganal Block is operated by Eni with an 82% interest, with Sinopec holding the remaining 18%. The block will eventually fold into a broader joint venture with Petronas, anchoring Eni's position in Southeast Asia's gas market over the longer term.Drilling is expected to continue through 2026 and 2027. If results hold, Geliga looks set to become a meaningful contributor to Indonesia's gas reserve base while reaffirming the Kutei Basin's role in both domestic supply and international LNG trade.Writer: Timothy Evan