In this second article, I will take a look upstream company landscape in Indonesia, starting with a quick review of the M&A deals in 2024 and then going through the companies that are currently involved.

2024 M&A summary

After some big deals in 2023, this year has been quiet for M&A in Indonesia, with only a single new deal announced.

Indonesia - Announced M&A deals - 2024

• In early October, Energy World Corporation (EWC) announced that they had signed an SPA with Energi Mega Persada (EMP) for the latter to acquire EWC's 51% operated stake in the Sengkang PSC that is located onshore South Sulawesi. The deal is for US $35 million and completion was announced in late October. EMP now hold 100% interest in the Sengkang PSC.

Apart from this, we still have some uncertainty around Criterium Energy's deal to divest their interest in the Bulu PSC. Here, we are awaiting the buyer details as well as news that payment milestones have been hit.

Company commentary and analysis

I have expanded the number of companies covered from last year and included production data (working interest production to 2024 H1) for all of those companies covered.

As can be seen from the chart, the working interest production attributed to these companies has decreased over the years. The impact has been much more pronounced on oil production than gas production, with Pertamina being the biggest winner. We have also seen entities owned by the regional governments (BUMDs) taking a greater role, but generally as a minority partner (up to 10%).

International companies - The majors

Back in 2015, the working interest production of the major IOCs made up over 41`% of Indonesia's production. By 2022, that have fallen to under 14% but has recovered slightly from there to almost 17% by the end of the first half of 2024. The loss of Chevron's stake in the Rokan PSC and TotalEnergies stake in the Mahakam Offshore PSC at their expiries played a big part in the reduction.

Taking a look at the majors in more detail, 2024 has been pretty stable when it comes to moves by the majors in Indonesia. We are at a point where the only remaining uncertainty is around TotalEnergies, with the other remaining players having both anchor projects and a willingness to continue to invest, whilst those that have exited seem unlikely to return.

• BP: the Tangguh LNG project continues to drive BP's role in Indonesia, with the third train finally coming onstream in 2023 and increasing its margin as the top gas producing PSC in the country. This year, we saw FID taken on the Ubadari, CCS, Compression (UCC) project. This will see the development of the Ubadari field as well as the construction of CCS and compression facilities. Investment in the project is reported to be US $7 billion, with the project having the potential to unlock around 3 Tscf of additional gas resource as well as sequestering around 15 MMte of CO2 in its initial phase. The project is planned to come onstream in 2028. They also have interests in other basins, with a 30% stake in the Andaman II PSC and 100% interest in two blocks offered in the second 2021 bid round; Agung I and Agung II, that are located offshore northern Bali and Lombok.
• Eni: their focus continues to be the Kutei basin, following some big M&A and exploration success in 2023. This year has seen the approval of two PODs. The first will see the integrated development of the Geng North and Gehem fields that will create a "Northern Hub" for the basin. The second will see the development of the Gendalo & Gandang fields as tie-backs to the existing "Southern Hub" at the Jangkrik field. Eni will also continue to explore in their Kutei basin acreage and may take up further acreage in the basin. However, their interest in other basins could be limited and they have looked to divest their 85% stake in the Krueng Mane PSC that sits offshore North Sumatra.
• ExxonMobil: the Cepu PSC is ExxonMobil's only current upstream interest in Indonesia however, it is the second largest PSC in terms of oil production and will likely overtake Pertamina's Rokan PSC over the next couple of years given that 2024 saw ExxonMobil take drill the first wells of the Banyu Urip Infill Clastic project that will see seven infill wells drilled in the Banyu Urip field in the Cepu PSC. In addition to their upstream interests, ExxonMobil have also been very active in promoting the CCUS potential in Indonesia and will be looking at business models that could make this an attractive investment.
• TotalEnergies: looked they were drifting towards an exit since losing their 50% interesting in the Mahakam Offshore PSC at expiry at the end of 2017. Their only remaining interest is their 13.5% interest in the Sebuku PSC that has some late-life production from the Ruby field and is set to expire in 2027. My assumption was that they would complete their exit at expiry of this contract however, there are rumours that we may see them take a 50% stake in the Bobara PSC in West Papua from PETRONAS in what would be a mirror to the recent deal that saw PETRONAS take a 50% stake in the PPL 576 offshore PNG that contains the Mailu prospect.

The recent majors to exit the upstream space in Indonesia are ConocoPhillips (exit in 2021), Shell (2023), and Chevron (2023). I see it as very unlikely that any of the companies would re-enter although Chevron have been active in the geothermal space.

International companies - Mid-caps

There is a limited pool of mid-caps in Indonesia, with five companies remaining (by my loose definition).

Other mid-cap IOCs with historical interests over the last 10 years that I may include in this category are ENGIE (acquired by Neptune), Neptune (acquired by Eni), Premier (merged to form Harbour), Santos (Indonesia assets acquired by Ophir), and Talisman (acquired by Repsol).

Across these five remaining companies, we see a broad spread of strategies.

• Cenovus (Husky): following the merger of Husky and Cenovus, I was expecting Indonesia to be considered for divestment. However, they have continued to invest and add developments at their Madura Strait PSC, although local gas demand is a bit of a limiting factor with Pertamina's Jambaran-Tiung Biru (JTB) field coming onstream in late 2022. They last took new exploration acreage in the 1st 2021 bid round with the Liman PSC.
• Harbour Energy: are partnered with Mubadala in Andaman including a 20% stake in the South Andaman PSC where the Tangkulo-1 discovery was made (see above). They strengthened this partnership by adding a 60% operated stake in the Central Andaman PSC this year. In addition, they have legacy production from the Natuna Sea Block A PSC as well as a 50% stake in the Tuna PSC that is awaiting FID once Zarubezhneft divest their interest. Their interest in expanding into other basins may be limited as they digest their acquisition of Wintershall DEA that completed in September.
• KUFPEC: have had a lot of legacy interests in Indonesia but came into the year with their main remaining interest being a 33.33% interest in the Natuna Sea Block A PSC. However, they were active in the first bid round of 2024, taking a non-operated stake in both the Amanah and Melati PSCs.
• Mubadala Energy: whilst their current production is limited to the Ruby field in the Sebuku PSC (see above comments for TotalEnergies), Mubadala came into the year with a major stake in three Andaman PSCs (Andaman I / Andaman II / South Andaman) and added to that this year by taking a 40% stake in the Central Andaman PSC offered in the first bidding round of the year. They also completed an exploration and appraisal well program that included further success at Tangkulo-1 well in the South Andaman PSC (80% + operator). They will now progress their multi-Tcf Andaman discoveries to pre-FEED to evaluate development and commercialization options. They certainly have a good reason to stay but may limit their interests to the Andaman area for now.
• Repsol: have divested from the rest of Southeast Asia but have held onto Indonesia, albeit with a reduction in their holdings in recent years. Their major interests are now the producing Corridor PSC and the Sakakemang PSC that contains the once vaunted Kaliberau Dalam discovery. This year saw little in the way of movements but the rumours of potential exit continue, with MedcoEnergi are still the obvious buyer if they can reach a deal.

International companies - Smaller players

There are a large number of smaller international investors that have had assets in Indonesia. I am going to focus on those that currently have an interest, with the below having had production over the last 10 years and being currently active.

As per the mid-caps, there are plenty of smaller international investors such as Ophir (acquired by MedcoEnergi), KrisEnergy (went into administration), or Manadala Energy (sold their asset due to financial stresses) that I could have included in the list.

In addition to the eight companies with production above, I have included an additional four companies below who do not currently have production but have an active current role in Indonesia.

• Agra Energi: have come to the fore given they hold a 16.67% stake in the North Ganal PSC that contains the multi-Tcf Geng North. With the field heading towards FID, it is unclear how Agra would fund their share of the development (I'm not aware of a carry agreement) and there have been reports that they are looking to divest their stake for up to US $500 million.
• Bumi Armada: were awarded a 51% operated stake in the Akia PSC offered in the 2023 bid round. The working area contains the Aster and Tulip discoveries. At award, it was suggested that the fields could be fast tracked into development using a Bumi Armada FPSO but I am yet to hear of further progress. There are strong rumours that Bumi Armada may merge with MISC and, if this comes to pass, then I would expect them to divest or relinquish their Akia stake.
• Conrad Asia Energy: they are progressing after a very positive last few years that included the award of two PSCs in West Aceh, adding to their previous interest in the Duyung PSC (Mako gas field). This year saw some good news at the Mako, with a binding GSA signed with Sembcorp in August adding to an earlier GSA signed with PGN. However, the farm-down process is still a work in progress, and development is likely stalled until a partner is found. At the Aceh PSCs, they have continued to mature this and are looking at options to develop the existing discoveries.
• Criterium Energy: the acquisition of Mont D'Or closed in early January and their focus this year has been on digesting the acquired assets (Tungkal & West Salawati PSCs) and demonstrating their operating capability. They have put a big focus on production growth and operating cost reductions, with 15 workovers undertaken in 2024 along with a 26% reduction in OPEX. They are also advancing plans to develop the Southeast Mengoepeh gas field in the Tungkal PSC, with POD approved and an MOU for an offtake agreement in place. There will be some challenges in getting the gas to a market, with micro-LNG reportedly under consideration. Going forward, the completion of the sale of their Bulu PSC stake is an important future milestone. Provided this happens in a timely manner, I believe they could have appetite for further acquisitions.
• Cue Energy: hold an 11.25% stake in the Mahato PSC (see above) and a 15% stake in the MedcoEnergi operated Sampang PSC that currently produces about 22 MMscf/d of gas from the Oyong and Wortel fields that are in decline. We have been waiting for FID on the Paus Biru gas development. Whilst we have seen improved terms granted for this development, I imagine FID will not happen until the future of the PSC is resolved given that it is due to expire in 2027. Given the good cashflows from Mahato, they could consider some acquisitions but this would depend on the appetite of their majority shareholder NZOG (who are in-turn owned by OGOG).
• Energy World Corp (EWC): the Australian company divested their 51% operated stake in the Sengkang PSC to EMP in October. However, they maintain in interest in the related power plant and LNG export project, although I am not current on the status of these projects and the LNG project seems to be terminally delayed. The Sengkang PSC was their only upstream interest in Indonesia.
• Genting Oil: the Malaysian company have had a 100% stake in the Kasuri PSC since its award in 2008. In 2023 we saw approval of a revised POD for the development of the Asap, Kido and Merah (AKM) fields. The revised POD sees about 2 thirds of the gas production will go to a new FLNG vessel on the coast, with the other third going to a new Ammonia and Urea plant. This year has seen them award a contract to Wison for the FLNG vessel. I can still see Genting looking for a farm-in partner to share some of the risks. The Kasuri PSC is Genting's only upstream holding in Indonesia.
• Jadestone Energy: had a big year in Indonesia with the Akatara gas field (Lemang PSC) coming onstream and being fully commissioned by the end of the year (there were no sold volumes in H1, therefore there is nothing on the production chart). However, with changes at the top of the company, we will need see if there are any shifts in strategy. For Indonesia, this could mean anything from a farm-down at Lemang, all the way through to new acquisitions.
• Lion Energy: the Australia listed company focus their attention on Seram Island, with a 2.5% stake in the CITIC-operated Seram (Non-Bula) PSC and a 60% interest in the East Seram PSC. Lion's production comes from the Oseil and Nief Utara oil fields in the Seram (Non-Bula) PSC with the undeveloped Lofin gas discovery in the same block providing significant upside potential. However, there are challenges when it comes to getting the gas to market, with limited demand on Seram Island and no export facilities (see CITIC for more details). For the East Seram PSC, Lion have identified a number of prospects and are currently offering a farm-in opportunity.
• Pexco / Tately N.V.: the Malaysian-owned company has a 100% interest in the Palmerah PSC and also took a 49% stake in the Akia PSC that was offered in the first bid round of 2023, partnering with Bumi Armada (see below) who have the same owner. There are rumours around both the future of Bumi Armada (potential merger with MISC) and the Palmerah PSC (potential sale). The Akia stake would also likely be divested / relinquished.
• RH Petrogas: the Singapore based company has an operated interest in the Kepala Burung and Salawati PSCs that have been producing a steady amount of oil and gas. I expect them to continue to harvest these blocks.
• TexCal Energy: operate the Mahato PSC where the PB field came onstream in late 2020 and is now producing at almost 6,000 bbl/d, with plans to grow this to 10,000 bbl/d. However, the PC-01 exploration well, drilled at the end of this year, came up dry. TexCal also hold exploration interests in the Bohorok PSC (100%, awarded in 2012) and the Bengara I PSC (100%, awarded in 2023).

Domestic companies

There is a very long list of domestic companies. I will just mention a few of the most significant here, although it is a longer list than last year's report.

I will have the focus on the larger companies, or those that have been making moves or could make moves over the coming year.

• EMP: this year has seen them grow. The first move saw them complete the previously announced deal to acquire Pertamina's 90% stake in both the Siak and Kampar PSCs. They then acquired EWC's 51% operated stake in the Sengkang PSC in October, giving them 100% interest. I expect they will continue to look for similar opportunities this year.
• MedcoEnergi: the last few years has seen plenty of ambition and a healthy appetite for acquisitions, with the acquisition of ConocoPhllips stake in the Corridor PSC having the biggest production impact. However, the last couple of years has been much quieter on the acquisition front and they have been working hard on their assets, both in terms of development but also in terms of negotiating improvements to the fiscal terms. We may also see some further portfolio trimming with their remaining Thailand asset B8/38 (Bualuang field) often suggested as prime candidate. They will also no doubt be linked with new acquisitions in Indonesia and around the region. They also have a number of PSCs approaching expiry which will need some attention.
• Prima Energi: have quietly appeared and are prospering. Their first move came with the award of the Bawean PSC (Camar field) in 2022 and was followed by the acquisition of 100% interest in the Northwest Natuna PSC (Ande Ande Lumut heavy oil field) in 2023. This year has seen them restart production Camar field in February, growing production to over 2,000 bbl/d (although the H1 average was about 10% of this). This is an investment that aligns very will the government goal to reactivate idle wells and hopefully will see them trusted to with other shut-in assets. For Ande Ande Lumut, Prima received POD approval for a revised POD in April and they are working through FEED with an eye on FID early 2025, with development now underway through a CPP + FSO. I would imagine they would like a well-funded partner to share some of the risk here.
• Saka Energi: they currently have 100% operated production from the Muriah and Pangkah PSCs as well as non-operated production from the Ketapang, Muara Bakau, and Bangkanai PSCs as well as stakes in a number of exploration blocks. There has been plenty of uncertainty hanging over Saka's role in the upstream space given that their parent company in PGN, with talk about divestments for select assets or for the whole portfolio.
• Samudra Energy: hold a 20% stake in the CNOOC-Cenovus operated Madura Strait PSC. There have been persistent rumours of potential divestment of this stake but it seems they being a bit indecisive or want an unrealistic price as there would be plenty of interest in a good producing asset with some growth potential.
• Sele Raya: has production from their 100% operated interest in the Belida PSC. They also hold a 15% in the Blora PSC that has some limited production. This year saw them awarded the Amanah PSC in the first bid round in partnership with MedcoEnergi and KUFPEC.

Japanese companies

Japan has a long history with oil and gas in Indonesia but this has significantly shrunk over the last decade owing to the expiry of legacy PSCs. The majority of the remaining interest is in the LNG export projects but some smaller holdings are also maintained.

There have been no real changes when it comes to presence or strategy over the last 12 months.

The LNG projects where there is a Japanese company interest are:

• Tangguh LNG: a number of Japanese companies have an interest across the three unitised PSCs including JOGMEC, JX Nippon, Mitsui, Mitsubishi, INPEX, Sojitz, and Sumitomo. I don't see any changes likely here.
• Donggi Senoro LNG: Japanese interest here is held by Mitsubishi, with an interest in both the LNG plant and the Senoro-Toili JOA. I don't see any changes likely here.
• Bontang LNG: there is no direct interest in the project since INPEX lost their 50% stake in the Mahakam Offshore PSC. when it expired. However, INPEX still hold a small stake in the Sebuku PSC (Ruby field) that provides some limited feedstock but I doubt we will see any change prior to the expiry of the PSC in 2027.
• Abadi LNG: INPEX hold a 65% operated stake. With the project progressing, they could consider a farm-down of minor stakes to Japanese off-takers. Alternatively, could we see a larger stake sold to a new project partner?

Outside of the LNG projects, the holdings are limited.

• JAPEX: hold a 25% stake in the Kangean PSC. EMP hold the other 75% and may be keen to take on this stake.
• MOECO: hold a 10% stake in the Sakakemang PSC that is home to the once famous Kaliberau Dalam discovery. Could be a candidate for divestment.

On the farm-in side, Japanese companies may show an interest in the Andaman PSCs if the volumes lead to an LNG export development and would also be keen to get involved in Eni's Kutei basin assets if the opportunity presented itself.

Korean companies

Korean companies have a shorter history within Indonesia there are two companies with a current presence and KNOC also had some historical interests.

Again, it is the gas-to-LNG projects that are the focus due to their offtake agreements.

There is only one gas-to-LNG project with a direct Korean company interest.

• Donggi Senoro LNG: Korean interest here is held by KOGAS, with an interest in both the LNG plant (14.975%) and the Senoro-Toili JOA (9.8%). KOGAS is also an off-taker, with a contract for 0.7 mtpa of LNG. However, we have seen a price dispute surrounding the mid-term contract price paid by KOGAS which did not go in their favour. As a result, they have stated they will cut their exposure to the project, although it is not clear exactly what is meant by this (it could just be the offtake contract).

Outside of this project, KOGAS also hold 15% stake in the Krueng Mane PSC together with Eni and I imagine they may divest / relinquish this.

The only other Korean presence in Indonesia's upstream came from the 2nd bid round of 2022.

• POSCO International: signed the Bunga PSC in July 2023 (offered in 2022). I have heard little since this entry but I could see them looking for other opportunities.

Chinese companies

Chinese companies are involved in a number of upstream projects in Indonesia but also lost a lot of production at the expiry of legacy PSCs.

We still see a good spread of Chinese companies with interests in Indonesia's upstream.

• CITIC: Hong-Kong listed CITIC operate the Seram (Non-Bula) PSC that produces from the Oseil and Nief Utara oil fields. The Lofin gas discovery offers significant potential if they can find a way to market the gas. I looked at the potential for an FLNG solution in a previous article: https://www.linkedin.com/pulse/flng-new-dawn-part-3-potential-indonesia-robert-chambers/. If they can progress to a POD approval, then they may look to farm-out.
• CNOOC: hold a 13.9% stake in the Tangguh LNG project and a 40% joint-operated stake in the Madura Strait PSC. They have previously held stakes in a number of other PSCs, most notable the South East Sumatra PSC, but lost these on expiry. They may show interest if a major acquisition opportunity comes up but my expectation is that they will hold their existing assets.
• CPC: had some legacy interest in Indonesia, including the Sanga Sanga PSC until its expiry in August 2018. Their current position is limited to a stake in the East Seram PSC that they farmed into back in 2019, taking a 40% stake from Lion Energy through their OPIC subsidiary.
• Jindi Group: currently operate the Merangin Dua PSC since acquiring Sele Raya's stake back in 2018. They also have 100% interest in the South Jambi B PSC, where they have managed to restart production since being awarded the block in 2018. I am not aware of any expected movements.
• PetroChina: have a reason to stay with a 20-year extension having been granted for their operated Jabung PSC in 2021 (extension valid from 2023) where we may see a local government partner take 10% this coming year. I believe the neighbouring Bangko PSC was also extended at this time but haven't managed to confirm this. However, they also lost a number of their smaller PSCs at their expiry. PetroChina's other stakes come through their ownership of SPC, with the former Singapore company having a stake in the Sampang PSC (40%) and Kakap PSC (15%). As per CNOOC, I don't see them having any real growth ambitions in Indonesia at this time, but neither a desire to exit. Update (30 Jan 2025): PetroChina have notified their partners that they do not want to extend their interest in the Sampang PSC if it gets extended beyond its current December 2027 expiry.
• Sinochem: hold a 20% stake in the Merangin Dua PSC and previously had an interest in the Belida PSC that they divested back in 2020. I don't expect them to have any growth plans and could easily see them look to divest their remaining asset.
• Sinopec: have an 18% stake in the three legacy Chevron PSCs that were acquired by Eni. These are the Rapak, Ganal and Makassar Strait PSCs, with some small production coming from the latter two but the much bigger potential of being involved in Eni's planned development of the legacy IDD fields. Sinopec were also active in the first bid round of 2024, taking an interest in the Melati PSC alongside Pertamina and KUFPEC.

The regional NOCs

Southeast Asia has seen the regional NOCs take an increasingly important regional role outside of their home countries. Two of the three main regional NOCs currently have production in Indonesia and I can't see PVEP spreading their wings at this point.

For Indonesia, PETRONAS is the main regional NOC with a significant stake holding, whilst PTTEP is stuck waiting on the sidelines.

• PETRONAS: have a growing interest in Indonesia but shrinking WI production. Their current production comes from one operated PSC; Ketapang, and three non-operated blocks; Jabung PSC (albeit a smaller stake since renewal), Natuna Sea Block “A” PSC, and Madura Offshore PSC. They made in big M&A move in 2023, taking a 15% stake in the Masela PSC (Abadi) and they have just (January 2025) taken FID on their Hidayah field development in the North Madura II PSC in which they hold a 100% interest. The PSC sits adjacent to their existing Ketapang PSC and their may be some potential for them to look at a partner.
• PTTEP: they have held an interest in the Natuna Sea Block “A” PSC since 2013 but would like to grow in Indonesia. However, there are continuing legal issues relating to the 2009 oil spill at the Montara field (in Australia, but impacted Indonesia). They will be unable to invest further until these issues are fully resolved.

Assets on the market / potential opportunities

The table below is a view of the current assets on the market together with some of the potential opportunities that I believe could arise this year.

KeyFacts Energy Industry Directory: Holt Energy Advisors