SK Earthon secures rights to explore 2 offshore oil blocks in Indonesia

SK Earthon Co., the petroleum exploration and production (E&P) unit of South Korea’s top energy company SK Innovation Co., has secured rights to develop two promising oil and gas blocks offshore Indonesia – a significant expansion of its upstream portfolio in Southeast Asia.

SK Earthon said on Thursday it won the rights to explore two blocks –Serpang, northeast of Java Island, and Binaiya, near the eastern Maluku Islands – through a competitive bidding process organized by the Indonesian government.

Each block spans about 8,500 square kilometers, roughly 14 times the size of Seoul.

During IPA Convex 2025, Indonesia’s premier oil and gas industry exhibition held at the Indonesia Convention Exhibition (ICE) from May 20 to 22, SK Earthon signed production sharing contracts with Indonesia’s oil and gas regulatory body, SKK Migas.

The signing ceremony was attended by key government and company officials, including Indonesian President Prabowo Subianto, Minister of Energy and Mineral Resources Bahlil Lahadalia, SKK Migas CEO Dwi Soetjipto and Kim Kyoung-jun, head of SK Earthon’s Planning & Support Office.

The acquisition cements SK Earthon’s strategic presence in the region, complementing existing assets in Vietnam and Malaysia, and giving new momentum to its "clustering" strategy in Southeast Asia – an approach that focuses on operations in high-potential areas to improve efficiency and synergy.

“Leveraging our success in Peru and Vietnam, we intend to make Indonesia a core part of our upstream growth story,” said an SK Earthon official.

HIGH-POTENAIL FRONTIER

The Serpang block is located in one of Indonesia’s most prospective hydrocarbon basins, in the northeastern region of Java, adjacent to multiple producing fields.

Industry estimates suggest undiscovered recoverable reserves of up to 1.2 billion barrels of oil and 6.3 trillion cubic feet (tcf) of gas in the Serpang block.

SK Earthon holds a 14% stake in the block, with Malaysia’s state-owned oil company, Petronas, serving as the operator with a 51% stake, and Japan’s largest oil and gas company, Inpex Corp., owning the remaining 35%.

The Binaiya block, located near the eastern coast of the Maluku Islands, lies in a region known for its active exploration activities.

Preliminary estimates peg the block’s undiscovered reserves at around 6.7 billion barrels of oil and 15 tcf of gas.

 SK Earthon owns a 22% stake in the block, with Indonesia’s Pertamina and Malaysia’s Petronas holding 56% and 22%, respectively.

SK Earthon said it plans to carry out geological assessments and seismic surveys over the next three years to identify drilling prospects in both blocks.

REGIONAL STRATEGY

With the latest achievement, SK Earthon has now established a presence in all three of Southeast Asia’s largest oil-producing nations – Vietnam, Malaysia and Indonesia.

Earlier this year, the company discovered oil in Vietnam’s 15-1/05 and 15-2/17 blocks, located in the prolific Cuu Long Basin, which produces over 50% of Vietnam’s oil and gas.

In Malaysia, SK Earthon secured the rights to operate the SK427 block, located offshore in Sarawak, in 2022.

Last year, it further expanded its presence in Malaysia by becoming the operator of the Ketapu block within the SK427 block area.

SK Earthon holds an 85% stake in the Ketapu Cluster, while Petroleum Sarawak Exploration and Production (PSEP), Malaysia’s state-run oil and gas exploration firm, owns the remaining 15%.

Meanwhile, SK Innovation is continuously exploring opportunities to expand its investments in the upstream sector in Indonesia.

Alongside SK Earthon’s efforts, SK Innovation E&S (SKI E&S), the natural gas business unit of SK Innovation, is seeking cooperation with SKK Migas through a joint study aimed at enabling cross-border carbon capture and storage (CCS) projects for Korea and Indonesia.

Split off from SK Innovation in October 2021, SK Earthon has actively participated in overseas E&P projects while also focusing on green projects such as the CCS business based on its expertise in oil development technology.

Write to Woo-Sub Kim at duter@hankyung.com
In-Soo Nam edited this article.