Director General for Oil and Gas of the Energy and Mineral Resources Edy Hermantoro said Pertamina would sign the contract during the Indonesian Petroleum Association (IPA) conference in the middle of this month (May 2013).
"The first contract on the exploitation of shale gas reserves will be signed on the sidelines of the IPA conference in the middle of this month," Edy said here on Monday.
He said that the first shale gas production was expected in five years to come, namely in 2018.
The location of Pertamina shale gas working area is in North Sumatra near the border with Aceh province.
Provisional data indicated that shale gas reserves in the area accounted for about 16 trillion cubic feet (TCF).
He said that based on regulations, Pertamina could directly appoint a company for the development of shale gas without being required to call tender for its exploitation.
Edy said that his office would also announce the auction of shale gas blocks in Riau Province and Central Kalimantan Province.
"The auction will also be announced during the IPA conference," he noted.
The two blocks will be put on tender through a direct offer mechanism. He said that the government had received a total of 75 proposals for the development of shale gas in the country.
He said that the status of the proposals was still in assessment, in the process and would be processed.
Indonesia has begun developing shale gas since four years ago. Indonesia`s shale gas reserves are estimated to reach 574 TCF, larger than its coal bed methane (CBM) potentials which are estimated at 453.3 TCF and conventional gas at 153 CTF.
Indonesia`s shale gas reserves are among others found in Sumatra, Kalimantan, Java and Papua.(*)