Oil & Gas

Kuwait’s state oil company to expand in Indonesia

December 11, 2024, 8:21 AM

Workers on a rig in the Natuna field. Kuwait is investigating further developments in Indonesia

Kufpec developing gas blocks
Indonesia seeking self-reliance
Southeast Asia demand grows

State-owned Kuwait Foreign Petroleum Exploration Company plans to expand its operations in Indonesia, according to the company’s senior executive.

Kufpec is a subsidiary of Kuwait Petroleum Corporation, tasked with exploring and extracting oil and gas outside Kuwait’s borders. It is active in nine countries across Australasia, Africa, North America and Europe.

In Indonesia Kufpec already operates in the Natuna Sea with a participating interest in Natuna Block A which supplies gas to Singapore, and the Anambas Block, where it discovered a new oil and gas reservoir in 2022.

The company is now in the process of securing development approval.

“We are particularly focused on potential blocks in the Natuna Sea region, which aligns with our ongoing efforts to develop the Anambas Block,” Sara Al Baker, Kufpec’s Indonesian country manager, was quoted as saying by Reuters.

The company is conducting a study on the Natuna D-Alpha gas block. One of the biggest resources in the world, the concession has an estimated 230 trillion cubic feet of gas.

“I think it is a very strategic project for Indonesia,” Al Baker said. However, the field has high carbon dioxide content, which is “the main challenge.”

Kufpec’s expansion in Indonesia aligns with the country’s efforts to boost local production and reduce reliance on imports. Once an Opec member, the Southeast Asian state became a net importer of oil as its infrastructure is ageing because of low investment. Projects have also been facing red tape and completion from renewables.

Al Baker highlighted the Indonesian government’s efforts to offer better contracts to attract investors.

Kufpec is part of two consortia that signed contracts last September to explore the Melati and Amanah blocks.

Earlier this year the company signed a $120 million investment agreement with Egypt to increase oil and gas production in the Gulf of Suez and announced expansion plans in Asia through its Malaysia office.

The International Energy Agency forecasts that more than 25 percent of the energy demand growth over the next 10 years will come from Southeast Asia, becoming the second biggest growth centre after India by 2035.

Mubadala Energy, the wholly owned subsidiary of Abu Dhabi’s Mubadala Investment Company, made a significant offshire gas discovery in Indonesia last December.

It holds 80 percent of the working interest, being the largest net acreage holder in South Andaman.