SK Earthon, the oil exploration subsidiary of SK Innovation Co., acquired a 34% stake in Indonesia’s North Ketapang offshore block from Petronas North Ketapang Sdn. Bhd., the company said Nov. 23. Financial terms weren’t disclosed.
The purchase adds to SK Earthon’s Indonesian portfolio following government tender wins for the Serpang and Binaiya blocks in May. Petronas North Ketapang retains 51% of the block, located northeast of Java, while PT Pertamina Hulu Energi North Ketapang holds 15%.
The consortium plans to drill an exploration well by year-end 2025, though Indonesia’s regulatory environment has proven challenging for foreign energy operators. Recent mining law reforms imposed stricter domestic ownership requirements and local refining mandates, complicating project timelines and economics for international partners.
SK Earthon’s expansion comes as parent SK Innovation faces financial strains. The exploration unit recently moved to sell part of its Vietnamese portfolio, valued at ₩200 billion ($140 million), to strengthen its balance sheet.
The North Ketapang acquisition marks SK Earthon’s effort to cluster Southeast Asian assets across Indonesia, Malaysia and Vietnam. Whether the geographic concentration delivers operational efficiencies remains uncertain, particularly given the distinct regulatory frameworks and geological challenges across these jurisdictions. Permitting delays could push drilling schedules and inflate capital expenditure by 15% to 25%, according to industry analysts.
