Indonesia awards second shale gas block to three foreign firms

JAKARTA (REUTERS) - Indonesia's energy and mining ministry on Monday awarded its second shale gas exploration block to a consortium of foreign oil firms that included New Zealand Oil & Gas Ltd.

The New Zealand company, along with Canada's Bukit Energy and Pacific Oil & Gas Ltd in Hong Kong, won the tender to explore the Kisaran block in North Sumatra, said Saleh Abdurrahman, the ministry's spokesman.

The consortium agreed to commit more than US$11.5 million (S$ 14.3 million), which will go to conducting a geology and geophysics study, a seismic survey and to dig at least one exploration well.

Monday's announcement comes more than a year after Indonesia's state-owned Pertamina won the country's first shale gas block, also located in North Sumatra.

Indonesia hopes shale gas output can help compensate for declining energy production from mature oil and gas fields.

The former OPEC member has been struggling for years to attract enough investment to halt declining domestic output, which has dropped to about half of its 1995 peak of 1.6 million barrels per day.