Indonesia approves $3bn development plan for South China Sea gas block

JAKARTA: Indonesia has approved the first plan of development for the Tuna offshore gas field with total estimated investment of $3.07 billion up to the start of production, upstream oil and gas regulator SKK Migas said on Monday.

The Tuna field, located in the South China Sea between Indonesia and Vietnam, is expected to reach peak production of 115 million standard cubic feet per day (MMSCFD) in 2027, SKK Migas spokesperson Mohammad Kemal said.

Natural gas from Tuna field, which is operated by a local unit of London-listed Harbour Energy, is expected to be exported to Vietnam starting in 2026, Indonesia’s energy minister has previously said.

SKK Migas chairman Dwi Soetjipto on Monday said that aside from economic benefits, development of the project would underline Indonesia’s maritime entitlements.

“There will be activity in the border area which is one of the world’s geopolitical hot spots,” Dwi said in a statement.

“The Indonesian navy will also participate in securing the upstream oil and gas project so that economically and politically, it becomes an affirmation of Indonesia’s sovereignty.” Energy activities in the South China Sea have in recent decades been held hostage by disputes over which country has sovereign rights, with work by Vietnam, Malaysia and the Philippines in their exclusive economic zones disrupted by Chinese coast guard or marine surveillance vessels.

China claims sovereignty over almost the entire South China Sea citing its own historical maps, claims that an international arbitration tribunal in 2016 ruled have no legal basis. In 2021, China told Indonesia to stop drilling for oil and natural gas in maritime territory that both countries regard as their own, people familiar with the matter told Reuters at the time.