© DJMIGAS 201210

KEMENTERIANESDM

VANCOUVER, CANADA, May 9-13, 2011

MINISTRY OF ENERGY AND MINERAL RESOURCESDIRECTORATE GENERAL OF OIL AND GAS

INDONESIA GAS SITUATION

by :

Agus Cahyono AdiDeputy Director for Oil and Gas State Revenue

Delivered at:

WORKSHOP ON UNCONVENTIONAL GASAPEC ENERGY WORKING GROUP (EWG 41th )

© DJMIGAS 201210

KEMENTERIANESDM

22

AGENDA OIL AND GAS CONDITION

GAS POLICY

GAS INFRASTRUCTURE PLAN AND DEVELOPMENT

GAS BALANCE

UNCONVENTIONAL GAS DEVELOPMENT

GAS DEVELOPMENT CHALLENGE

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33

OIL AND GAS CONDITION

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KEMENTERIANESDM

INDONESIA’s GAS PRODUCTION 2000 – 2011*)

*) Data s.d. Maret 2011

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000M

MSC

FD

PRODUCTION 7,927 7,690 8,318 8,644 8,278 8,179 8,093 7,686 7,883 8,386 9,336 8,944UTILIZATION 7,471 7,188 7,890 8,237 7,909 7,885 7,785 7,418 7,573 7,912 8,829 8,483Losses 456 502 428 407 369 294 308 268 310 474 507 461

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*

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KEMENTERIANESDM

INDONESIA’s GAS SUPPLY 2000 - 2010

5

0

4,000

8,000

MM

SCFD

TOTAL KONSUMSI 6,416.4 6,260.4 6,857.4 7,255.6 7,086.1 6,934.3 6,901.1 6,639.3 6,758.2 7,008.7 7,787.6

EXPOR 4,348.6 4,184.2 4,768.8 5,049.0 4,762.3 4,615.3 4,377.2 4,182.3 4,114.3 4,152.4 4,827.2DOMESTIC 2,067.8 2,076.5 2,088.6 2,206.6 2,323.8 2,319.0 2,523.9 2,457.0 2,643.9 2,856.3 2,960.4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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6

GAS RESOURCES = 334.5 TSCF

1.28

4.23

8.56

3.70

51.46

18.33

24.32

NATUNA5.74

NORTH SUMATRA

15.22

17.90

CENTRAL SUMATRA

ACEH (NAD)

SOUTH SUMATRA

WEST JAVA

6.40

EAST JAVA

EAST BORNEO

CELEBES

MOLUCCAS

PAPUA

(Advance Resources Interational, Inc., 2003 processed)

PROVEN = 108.4 TSCFPOTENTIAL = 48.74 TSCFTOTAL = 157.14 TSCF

CBM RESOURCES = 453.30 TCF

GAS RESERVES (TSCF)

NATURAL GAS RESOURCES - RESERVES & CBM RESOURCES

(AS OF JANUARY 1st 2010)

Total CBM Basin = 11(Advance Resources Interational, Inc., 2003)

Signed Contracts up to 2010:23 CBM PSCs

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KEMENTERIANESDM

77

GAS POLICY

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8

ROLE OF OIL AND GAS FOR NATIONAL DEVELOPMENT

High Technology

High Capital

High Risk

Sustainable National

Development

OIL &GAS INDUSTRI

FULFILL DOMESTIC FUEL DEMAND

CREATING MULTIFLIER

EFFECTS

SOURCE OF STATE REVENUE

INDUSTRIAL RAW MATERIAL

RESOURCES

© DJMIGAS 201210

KEMENTERIANESDM

NATIONAL GAS POLICY

9

A. IMPROVING EXPLORATION ACTIVITY TO INCREASE NEW

RESERVE (CONVENTIONAL AND UNCONVENTIONAL)

B. GAS ALLOCCATION POLICY

C. GAS PRICING POLICY (TO SECURE SUPPLY AND GROW

INVESTMENT)

D. INFRASTRUCTURE DEVELOPMENT

© DJMIGAS 201210

KEMENTERIANESDM POLICY IMPLEMENTATION

NO OUTLINE DETAILS

1 improving exploration activity to increase new reserve

• Opening new working area with the target singed contracts 40 working area per year baru pertahun

• In 2009, signed contracts 34 Working Area and in 2010, signed contracts 38 Working Area

• Develop unconventional gas resources (CBM dan shale gas)2 Gas allocation

policy Gas utilization is prioritized for domestic use by keeping

considering economic field development A new found gas reserve utilization allocation is prioritized for

fulfilling local needs. if there is an excess can be utilized for fulfilling the need outside the local.

Gas utilization for domestic needs is done by considering the availability of the infrastructure, reserve and the economic of field by prioritized upstream utilization ( electricity and fertilizer)

if there is a shortage (less gas supply) in certain area as result of lack of gas resources and infrastructure, so it can be done gas reallocation or swap as one form of contingency plan.

© DJMIGAS 201210

KEMENTERIANESDM POLICY IMPLEMENTATION CONTINUATION ......

NO OUTLINE DETAILS

3 Gas pricing policy (to secure supply and grow investment)

• Government regulate and determine gas price

• Gas price depend on the economic of gas field development and availability of infrastructure

• Gas price can be increased related to oil price, product’s price and the combination of product and oil price

• Gas price model selection consider state revenue by considering optimum of economic growth

• Determine gas price by considering balance between gas’ producer and consumer

4 Infrastructure Development

- Continue contruction transmission and distribution- Contruction of LNG Receviing termina in Jawa and

Sumatra

© DJMIGAS 201210

KEMENTERIANESDM

GAS INFRASTRUCTURE PLAN AND DEVELOPMENT

© DJMIGAS 201210

KEMENTERIANESDM Infrastructures: Existing and Planned

13

© DJMIGAS 201210

KEMENTERIANESDM

GAS BALANCE

© DJMIGAS 201210

KEMENTERIANESDM INDONESIA GAS BALANCE 2011-2025

MMSCFD

0

2.000

4.000

6.000

8.000

10.000

12.000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

CONTRACTED DEMAND POTENTIAL DEMAND

EXISTING SUPPLY PROJECT SUPPLY

POTENTIAL SUPPLY dari CADANGAN BELUM DIKEMBANGKAN POTENTIAL SUPPLY dari KAPASITAS UNIT DAN REGASIFIKASI

Existing SupplyPotential Demand

Project Supply

Contracted Demand

© DJMIGAS 201210

KEMENTERIANESDM

Grissik

THAILAND LAOS

CAMBODJAVIETNAM

BANGKOK

BRUNEI DARUSSALAM

KUALA LUMPUR EAST

MALAYSIA

MANILA

SINGAPORE

UJUNG PANDANG

PAGERUNGAN

SUMSEL

SUMUT

SUMTENG

JABARJATENG JATIM

EAST NATUNA

MALUKU SELATAN

Blok Masela

PAPUA

NAD

KALTIM

SULAWESI

INDONESIA GAS BALANCE MAP 2011-2025(EXISTING SUPPLY + PROJECT SUPPLY VS CONTRACTED DEMAND)

DURI

REG I (NAD)

Year 2011 2020 2025

Supply 235 78 19

Demand 25 75 15

Balance 210 3 4

Keluar Region 197 0 0

Net Balance 13 3 4

REG VII (KALIMANTAN BAGIAN TIMUR)

Year 2011 2020 2025

Supply 2889 1351 273

Demand 522 140 20

Balance 2367 1211 253

Keluar Region 1695 333 0

Net Balance 672 878 253

REG XI (KEPULAUAN RIAU)

Year 2011 2020 2025

Supply 550 150 0

Demand 103 36 7

Balance 447 114 -7

Keluar Region 575 318 80

Masuk Region 78 78 0

Net Balance -50 -126 -87

REG II (SUMATERA BAGIAN UTARA)

Year 2011 2020 2025

Supply 52 27 4

Demand 85 2 0

Balance - 33 25 4

Keluar Region 0 0 0

Net Balance - 33 25 4

REG VIII (SULAWESI BAGIAN SELATAN)

Year 2011 2020 2025

Supply 48 62 23

Demand 38 38 0

Balance 10 24 23

Keluar Region 0 0 0

Net Balance 10 24 23

REG IX (SULAWESI BAGIAN TENGAH)

Year 2011 2020 2025

Supply 0 410 403

Demand 0 0 0

Balance 0 410 403

Keluar Region 0 335 335

Net Balance 0 75 68

REG X (PAPUA)

Year 2011 2020 2025

Supply 880 1039 1024

Demand 2,5 5 0

Balance 877,5 1034 1024

Keluar Region 943 1028 1028

Net Balance -65,5 6 - 4

5

REG II (SUMATERA BAGIAN TENGAH &SELATAN)

Year 2011 2020 2025

Supply 1723 1451 106

Demand 870.1 385 0

Balance 852.9 1066 106

Keluar Region 1172 780 0

Net Balance - 319 286 106

REG IV (JAWA BAGIAN BARAT)

Year 2011 2020 2025

Supply 616 131 54

Demand 1440 583 0

Balance -824 -452 54

Masuk Region 619 604 0

Net Balance -205 152 54

REG V (JAWA BAGIAN TENGAH)

Year 2011 2020 2025

Supply 1.8 148 50

Demand 3.5 130 50

Balance - 1.7 18 0

Keluar Region 0 0 0

Net Balance - 1.7 18 0

REG VI (JAWA BAGIAN TIMUR & BALI)

Year 2011 2020 2025

Supply 467 342 149

Demand 573 275 42

Balance - 106 67 107

Keluar Region 0 0 0

Net Balance - 106 67 107

REG XII (MALUKU BAGIAN SELATAN)

Year 2011 2020 2025

Supply 0 450 450

Demand 0 0 0

Balance 0 450 450

Keluar Region 0 0 0

Net Balance 0 450 450

© DJMIGAS 201210

KEMENTERIANESDM

Grissik

THAILAND LAOS

CAMBODJAVIETNAM

BANGKOK

BRUNEI DARUSSALAM

KUALA LUMPUR EAST

MALAYSIA

MANILA

SINGAPORE

UJUNG PANDANG

PAGERUNGAN

SUMSEL

SUMUT

SUMTENG

JABARJATENG JATIM

EAST NATUNA

MALUKU SELATAN

Blok Masela

PAPUA

NAD

KALTIM

SULAWESI

INDONESIA GAS BALANCE MAP 2011-2025(EXISTING SUPPLY + PROJECT SUPPLY VS CONTRACTED DEMAND + POTENTIAL DEMAND)

DURI

6

REG I (NAD)Year 2011 2020 2025

Supply 235 78 19

Demand 185 229 229

Balance 50 -151 -210

Keluar Region 197 0 0

Net Balance -147 -151 -210

REG VII (KALIMANTAN BAGIAN TIMUR)

Year 2011 2020 2025

Supply 2889 1351 273

Demand 535 784 561

Balance 2354 567 -288

Keluar Region 1695 333 0

Net Balance 659 234 -288

REG XI (KEPULAUAN RIAU)Year 2011 2020 2025

Supply 550 150 0

Demand 247 234 234

Balance 303 -84 -234

Keluar Region 575 318 80

Masuk Region 78 78 0

Net Balance -194 -324 -314

REG II (SUMATERA BAGIAN UTARA)

Year 2011 2020 2025

Supply 52 27 4

Demand 260 203 201

Balance - 208 -176 -197

Keluar Region 0 0 0

Net Balance - 208 -176 -197

REG VIII (SULAWESI BAGIAN SELATAN)

Year 2011 2020 2025

Supply 48 62 23

Demand 83 111 110

Balance 35 -49 -87

Keluar Region 0 0 0

Net Balance -35 -49 -87

REG IX (SULAWESI BAGIAN TENGAH)

Year 2011 2020 2025

Supply 0 410 403

Demand 30 145 145

Balance -30 265 258

Keluar Region 0 335 335

Net Balance -30 -70 -77

REG X (PAPUA)

Year 2011 2020 2025

Supply 880 1039 1024

Demand 18.5 221 216

Balance 861.5 818 808

Keluar Region 943 1028 1028

Net Balance -81,5 -210 - 220

REG II (SUMATERA BAGIAN TENGAH &SELATAN)

Year 2011 2020 2025

Supply 1723 1451 106

Demand 1015.5 915 673.9

Balance 707,5 536 -567.9

Keluar Region 1172 780 0

Net Balance - 464.5 -244 -567.9

REG IV (JAWA BAGIAN BARAT)

Year 2011 2020 2025

Supply 616 131 54

Demand 1858 2281 2207

Balance -1242 -2150 -2153

Masuk Region 619 604 0

Net Balance -623 -1546 -2153

REG V (JAWA BAGIAN TENGAH)

Year 2011 2020 2025

Supply 1.8 148 50

Demand 168 449 449

Balance - 166.2 - 301 -399

Keluar Region 0 0 0

Net Balance - 166.2 - 301 -399

REG VI (JAWA BAGIAN TIMUR & BALI)

Year 2011 2020 2025

Supply 467 342 149

Demand 821 1165 1125

Balance - 354 -823 -976

Keluar Region 0 0 0

Net Balance - 354 -823 -976

REG XII (MALUKU BAGIAN SELATAN)

Year 2011 2020 2025

Supply 0 450 450

Demand 0 0 0

Balance 0 450 450

Keluar Region 0 0 0

Net Balance 0 450 450

© DJMIGAS 201210

KEMENTERIANESDM

UNCONVENTIONAL GAS DEVELOPMENT

© DJMIGAS 201210

KEMENTERIANESDM

19

Ministerial Regulation No. 036, revision to

Ministerial Regulation No. 033/2006

1.0 BcfD

1.8 BcfD

2008 2009 20102005 2006 20072004

PP: CBM – 1Rambutan

(GOI Sponsor)

Ministerial

–

Start of CBM era(1st CBM PSC Contract )

Increasing number of CBM ContractAverage production = 250 MSCFD/ well

Government Participation

Start of Commercial Period (Exploration)

Estimated CBM Production

PP: Pilot Project

Legend:

2008 2010

CBM Estimated Production~500 MMSCFD

CBM Estimated Production

~1500 MMSCFD

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Minister Decree No.036/2008, revision to Minister Decree No.

033/2006

Minister Decree No. 033/2006

CBM for Electricity Pilot Project

1998

Ministerial regulation No.1669

2007

ROAD MAP OF CBM DEVELOPMENT IN INDONESIA

CBM Estimated Production~1000 MMSCFD

2003 2005

Feasibility studyTechnical and Economical

20092008

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20

CBM for electrical power

CBM UTILIZATION PLANNING

CBM for LNG

INDUSTRY

CITY GAS

CNG for TRANSPORTATION

CBM for another domestic consumption

© DJMIGAS 201210

KEMENTERIANESDM

Merauke

Grissik

Semarang

Pacific Ocean

AUSTRALIA

Indian Ocean

Bangkok

Phnom Penh

Ban Mabtapud

Ho Chi Minh City

CAMBODIA

VIETNAM

THAILAND LAOS

Khanon

Songkhla

Erawan

Bangkot

Lawit Jerneh

WESTMALAYSIA

Penang

KertehKuala Lumpur

Manila

Philipines

South

China

Sea

Sing

apor

e Ga

s Tr

unkl

ine

NatunaAlpha

Kota KinibaluBRUNEI

Bandara Seri Begawan

BintuluEAST

MALAYSIA

Kuching

Banda AcehLhokseumawe

Medan

Duri

Padang

S U M A T R A Jambi

BintanSINGAPORE

SamarindaBalikpapan

Bontang LNG Plant& Export Terminal Attaka

TunuBekapai

KALIMANTAN

Banjarmasin

Manado

SULAWESI

Ujung Pandang

BURU SERAM

Ternate HALMAHERA

Sorong

IRIAN JAYA

JakartaJ A V A Surabaya

Bangkalan

BALI

SUMBAWA

Pagerungan

LOMBOKFLORES

SUMBATIMOR

I N D O N E S I A

Duyong

Port Dickson

Port Klang

Mogpu

Dumai

Batam

Guntong

Ardjuna Fields

MADURA

Jayapura

Maluku Selatan

West Natuna

Palembang

Cirebon

Existing PipelinePlanned Pipeline

LNG Receiving Terminal

CNG Plant

LNG Plant

Shale Gas Highlight Areas

NAD

KLASAFET FORMATION

TELISA SHALE

BAONG SHALE

EAST JAWA

WEST JAVA

GUMAI SHALE

SHALE GAS POTENTIAL ANDGAS INFRASTRUCTURE

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22

GAS DEVELOPMENT CHALLENGE

© DJMIGAS 201210

KEMENTERIANESDM INDONESIA GAS DEVELOPMENT

CHALLENGE Indonesia endowed with potential of variety energy resources conventional

as well as unconventional gas Domestic and Global Natural Gas demand increased Government of Indonesia is obliged to guarantee the availability of domestic

feed stock and fuel supply (including natural gas). Adequate infrastructure support is required to assure smooth supply and

distribution of domestic feed stock and fuel. Source of oil and gas in Indonesia located far from demand centre. Limited oil and gas infrastructures currently hinder feed stock and fuel

supply and distribution. Optimizing benefit of natural gas utilization for foreign exchange trade

balance and driver of domestic economic growth

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KEMENTERIANESDM

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