POSCO International inks oil and gas contract in Indonesia

A MOU signing ceremony between POSCO International and state-owned oil and gas company Pertamina Hulu Energi (PHE) held in Tangerang, Indonesia. [Courtesy of POSCO International]

South Korea’s POSCO International Corp. is set to challenge the gas exploration market in Indonesia by securing operating rights in a promising gas field with high exploration potential.

Following the success of its Myanmar gas project, which accounts for 30 percent of the company’s operating profit, POSCO International aims to replicate this achievement in Indonesia.

On Tuesday, POSCO International signed a production-sharing contract with the Indonesian government and state-owned oil and gas company Pertamina Hulu Energi (PHE) for the distribution of resources from the Bunga gas field. The signing ceremony took place in Tangerang, Indonesia, attended by POSCO International CEO Jeong Tak, and PHE CEO Wiko Migantoro. Under the contract, POSCO International will share the operating rights of the Bunga gas field with PHE, securing 20 percent of the oil and 22.5 percent of the gas produced from the field. The company was granted a six-year exploration period and a 30-year development and production period.

The Bunga Bunga block, with a total area of 8,500 square kilometers (14 times the size of Seoul), stretches from shallow waters to deep sea with depths ranging from 50 to 500 meters. Located on the eastern side of Java Island in Indonesia, it shares geological similarities with the nearby Pagerungan gas field, which has already yielded large-scale natural gas production. This similarity raises optimistic expectations for a successful exploration outcome in the Bunga block. The estimated gas reserves in the Bunga gas field are about 1.3 billion barrels. POSCO International plans to make a final decision on drilling in 2027, conducting comprehensive evaluations through 3D seismic surveys and other measures by deploying personnel from its headquarters until 2026.