Pertamina eyes 10-20 percent participating interest in Masela block

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Energy and Mineral Resources Minister Sudirman Said (2nd from right) briefs the press (March 24) on Masela block. (Image : ESDM)

JAKARTA (TheInsiderStories) – State energy company PT Pertamina is considering to acquire participating interest (PI) of between 10-20 percent in the Masela Block, which is located in the Arafura Sea. The block is operated by Inpex Corporation of Japan through Inpex Masela Ltd, in partnership with Shell, the non operating partner.

“As for Masela, Inpex has opened up opportunity for Pertamina to join in. Therefore, we will soon look at the Masela data room. We will discuss again later (with Inpex) how much interest Pertamina will be given,” Pertamina President Director Dwi Soetjipto told reporters last Thursday (March 24).

Dwi made the statement after a day earlier held a meeting with Inpex, which was facilitated by the Special Task Force for Upstream Oil and Gas Business (SKK Migas) at the Energy and Mineral Resources Ministry.

“We are looking (to farm-in) of around 10-20 percent interest,” he told reporters when asking how much interest Pertamina is looking for.

He said the next step is studying the data room provided by Inpex. “Once we have received the data, we will study it and we will then discuss with the existing operator, both Inpex and Shell to find out much stakes Pertamina can take,” he said.

Earlier, the local partner of Inpex was PT Energi Mega Persada Tbk (ENRG), a company owned by Bakrie Group. However, the group sold its 10 percent working interest back to Inpex after Bakrie suffering financial difficulties.

Inpex is not a new player in Indonesia’s oil and gas industry. Currently, Inpex owns 50 percent working interest in Mahakam Block, as non-operating partner. It also owns stakes in a number of oil and gas blocks, including in Papua and Natuna projects. However, Masela Block was the first block in which Inpex acting as the operator.

Currently, Inpex holds 65 percent working interest in Masela Block and the remaining 35 percent is held by Shell.

The block contains huge gas reserves of around 10.7 trillion cubic feet (tcf). Block Masela covers 4,291.35 square kilometers area, about 800 km to the east of Kupang town, the capital of NTT and over 400 km from Darwin, Australia at water depth of 300-1,000 meters.

Last week (March 23), President Joko Widodo said he has decided production facilities of Masela LNG project will be built onshore, instead of offshore as proposed by Inpex Corp, the operator of the block.

“After receiving various inputs and that since this is a long term project involving hundreds of trillions of rupiah, therefore based on calculations and considerations that I have made, we have decided (production facilities) to be built onshore,” President Joko Widodo said. He said the government hopes this project will help developing the region’s economy.

Inpex has submitted the revised Plan of Development (PoD) for Abadi Field in Masela Block worth around US$14 billion in second half last year. The first PoD was approved in 2010. Inpex revised the PoD I after discovering more reserves in the block.

The Energy and Mineral Resources Ministry (ESDM) earlier attempted to approve the PoD in October last year. However, the public debate over whether the operator should develop onshore facilities or floating LNG (FLNG) facilities has caused the approval to be delayed. (*)

The post Pertamina eyes 10-20 percent participating interest in Masela block appeared first on The Insider Stories.

Source: The Insiderstories
Pertamina eyes 10-20 percent participating interest in Masela block

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