Repsol's departure from the Indonesian oil and gas project adds to the list of global oil and gas companies leaving oil blocks in Indonesia. Previously, Shell exited the Abadi Masela Block, and Chevron also left the IDD Block.

However, unlike Shell and Chevron, Repsol still maintains its development of the Sakakemang Block in South Sumatra, Indonesia.

Arab company to take over Andaman III

Regarding the management of Andaman III, the Ministry of Energy and Mineral Resources (ESDM) has mentioned that the United Arab Emirates' oil company, Mubadala, is interested in taking over the management of the Andaman III Block, replacing Repsol.

Tutuka Ariadji, the Director General of Oil and Gas at the Ministry of ESDM, explained that Mubadala's interest is due to their distinct development concept compared to Repsol.

"Mubadala has its own concept; Repsol's results weren't favorable, but according to them, their concept is different," Tutuka said.

Tutuka further elaborated that Mubadala will conduct a joint study for the Andaman III block. However, as of now, Mubadala does not yet have participation rights in the Andaman III work area. "They can conduct a joint study first," he added.

Drilling yield no result

Repsol Indonesia's Stakeholders Relations Manager, Amir Faisal Jindan, stated that the decision to return the work area to the country was made after drilling at the Rencong-1X Well at the end of the previous year yielded no indications of the expected oil or gas findings.

"Yes, it's returned because the drilling at the Rencong-1X well did not yield the expected results," he told CNBC Indonesia on July 18, 2023.

Currently, Repsol is in the process of returning the Andaman III work area to the government. Nonetheless, he affirmed that Repsol will remain focused on developing their portfolio in other blocks, such as Sakakemang in South Sumatra. "We're still focused on development in the Sakakemang work area," he stated.

The Andaman III Block was an Exploration Work Area won by Talisman in a bidding process in 2009. The Cooperation Work Contract for Andaman III utilizes a cost recovery scheme with a duration of 30 years. In 2015, Repsol acquired Talisman, leading to the management of the work area by Repsol.

In 2019, Petronas, a Malaysian oil company, through its subsidiary Petronas Andaman B.V., officially acquired a 49% participation interest in the Andaman III Work Area from Repsol Andaman B.V., a subsidiary of Repsol S.A. The work area is located off the coast of Aceh, covering an area of 4684.32 square kilometers after the exclusion of certain work areas.

Repsol Andaman B.V. has undertaken various activities including geological and geophysical studies, the acquisition of 3D seismic data covering 3,250 km2 conducted between 2016 and 2018, and exploration drilling at the Rencong-1X well.