Jakarta, 14 August 2023The four million dollars collaboration between Indonesia’s Pertamina and South Korea’s POSCO International to explore the gas fields off the coast of East Java is a dirty business deal that violates the commitments made by the presidents of South Korea, Yoon Suk Yeol, and Indonesia, Joko Widodo, to the global fight against climate change. This deal is also a stumbling block on Indonesia’s energy transition plans.

The Bunga Block gas exploration agreement was signed at the end of July, with an area of 8500km² and a depth of 50 to 500 meters with estimated gas reserves reaching 1.3 billion barrel¹.

“Fossil gas is often dubbed as “clean energy” even though the emission from methane is actually more damaging than CO2. Even on that account, burning gas still accounted for one-fifth of all worldwide CO2 emissions in 2019. This partnership will lock Indonesia as an emitting country in the future, worsening the global climate catastrophe”, according to Trend Asia Campaigner Novita Indri.

A study by the Environmental Defense Fund found that up to 60% of methane gas leaks along its supply lines in the United States2. In fact, methane gas has a global warming impact 86 times greater than CO2 per unit of mass in a span of 20 years3 and the impact of methane from new gas field projects will continue through the supply chain. 

Previously, at COP 26 in Glasgow, Indonesia and South Korea both committed to the reduction of global methane emissions by at least 30% before 2030, which has the potential to prevent more than 0.2 C of global warming by 2050. Note that from 2010 to 2019, fossil gas accounted for up to 42% of the growth in global CO2 emissions and, by 2020, for around 60% of methane emissions from the production of fossil fuels5.

“Expanding fossil gas will jeopardize both Indonesia and South Korea’s commitment to the Global Methane Pledge and their national climate targets. The two Asian economic powerhouses have so much potential to work together to accelerate the region’s transition from fossil fuels to renewable energy,” said Dongjae Oh from Solutions for Our Climate. 

The Bunga Block will be POSCO’s fourth gas exploration project in Asia after Myanmar, Malaysia and Australia. According to estimates, POSCO would spend up to $1 billion, or 1.3 trillion Won, on offshore oil and gas exploration projects by 2025, including the Bunga Gas project1. For the first three years of the exploration phase, this solely would cost US$ 4 million–around Rp 60 million– which would require massive subsidies from government6

The long-term duration of gas field management will lock Indonesia and South Korea with rising greenhouse gas emissions in the coming decades. Analysis from Global Energy Monitor², stated that the expansion of gas consumption in Asia is not in line with the scenario for achieving net zero emissions, which will attempt to limit the rate of global temperature increase to 1.5C in accordance with the Paris Agreement. This project will only worsen Indonesia⁷ and South Korea’s highly insufficient commitment⁸ to the Paris Agreement.

“We urge POSCO International to stop expanding fossil fuels in our country, and thwart our transition to renewable energy to achieve carbon neutrality. Rather than exposing itself to stranded asset risk as the world moves away from fossil fuels, POSCO International can lead the energy transition by leveraging its technical expertise and investing in renewables and energy storage technologies”, said Novita.

Not only that, this consortium also plans to explore the potential use of CCS/CCUS and blue hydrogen/ammonia¹ projects, which is only a cosmetic effort for the fossil energy industry to greenwash their business interests.

“To avert a climate catastrophe, the world needs to halve its emissions by the end of this decade. Yet, South Korean oil and gas majors are fuelling the dash for gas in Asia by using dangerous distractions, such as CCS and blue hydrogen-ammonia, which are expensive and unproven. This also exposes them to financial and legal risks as more and more companies are being held accountable for their climate impacts,” said Dongjae Oh. 

In a scenario calculated by the International Energy Agency, in order to fight climate change, gas expansion should peak in 20253 and global gas production declines at a rate of 5% per year and decrease dramatically up to 75% by 2050⁹. In this scenario, there is absolutely no reason to expand fossil gas production.

“In the middle of global public pressure to get rid of dependence on fossil energy and the world’s orientation towards low carbon emission, there is no room left for fossil energy projects like this. Indonesia should prove its commitment in encouraging a just energy transformation, by maximizing the potential of renewable energy which is getting cheaper and more reliable” concluded Novita.




3 https://globalenergymonitor.org/report/asias-gas-lock-in/ 


5 Why Gas is a the New Coal, Climate Analytics, November 2021






Photos are available here : https://bit.ly/fossilclimateimpact 

Photo by Melvinas Priananda/Trend Asia