Gas Price Drop Hinders Sakakemang Block Development

Summary

The Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) said the decline in gas demand had disrupted the Sakakemang Block development. Gas demand plummeted due to the Covid-19 pandemic. As a result, Repsol -the operator of the oil and gas block located in Musi Banyuasin, South Sumatra- is having difficulty finding gas buyers. Sakakemang Block development can only be done if there is a gas sale and purchase agreement (PJBG).

"There is also an impact because [gas] demand has plummeted," SKK Migas deputy of operations Julius Wiratno told katadata.co.id on Tuesday (5/19). According to him, under these conditions, Repsol can change the production schedule. Moreover, it takes time to recover gas demand since it is waiting for the Covid-19 outbreak to end. SKK Migas and Repsol previously tried to accelerate the production of Sakakemang Block with a gas potential of approximately 2 trillion cubic feet (Tcf).

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