In the east of Borneo, one of the greater islands of the Indonesian Archipelago, oil is produced from three centers 1. The Tarakan-Bunju center (since 1905) in the north, on islands along the east coast, 2. The Balikpapan center (since 1897), on the main island, farther south along the same coast, and 3. Tandjung (discovered 1938), farther inland.

The oil occurs in the Tertiary sediments of the East Borneo basin. The history of the infilling is similar to that of other Indonesian basins--after transgression of the Tertiary and deposition of basal sands, subsidence continued and a thick shale series was deposited in the central part of the basin. As the sea became shallower, sands that cover the shale series were laid down.

Toward the end of the Pliocene and continuing well into the Pleistocene, the basin was folded into rather complicated anticlinoria, mostly parallel to the coast.

Oil is produced from the transgressive lower sands (Tandjung) but mainly from the sands overlying the shale series (Balikpapan and Tarakan-Bunju centers). It is assumed that these shales contained the oil-mother formations.

In East Borneo all oil fields, except Tandjung, carry a cap of asphaltic oil above paraffinic oils.