International oil and gas companies are slowly leaving projects in Indonesia. Chevron will be leaving the Indonesia Deepwater Development (IDD) project in East Kalimantan, while Shell will be leaving the Masela Block, which is a giant natural gas project in Maluku.
The Ministry of Energy and Mineral Resources have set a deadline for both companies to settle their issues and handover the projects to the government because the projects have been neglected for a long time and potentially affected the national oil and gas production target of 1 million barrels per day and 12 billion standard cubic feet per day of gas in 2030.
Chevron’s IDD project takeover
Minister of Energy and Mineral Resources Arifin Tasrif stated that the government will be taking action against the IDD project because Chevron is yet to appoint a replacement after announcing their exit from the project.
Because of the importance of the IDD project, Arifin reiterated that of there is no apparent solution until July 2023, the government will be considering other options.
“We hoped that on July, there will be certainty concerning IDD. If there is none, we will consider other options,” Arifin said.
However, Arifin did not provide further details concerning the other option that the government will be taking.
Masela Block continuation
Meanwhile, concerning the Masela Block, Arifin confirmed that PT Pertamina will be taking over Shells participating rights by 35%. The takeover process is expected to begin by the end of June 2023.
“The numbers are there, and it is on target. The participation rights will be taken over and will be completed by the end of this month,” Arifin said at the Ministry of Energy and Mineral Resources office on Friday (16/6).
Arifin said that Pertamina will pay for half of the participation rights as proof of its commitment. The company will settle the remaining cost later.
“This month, we will pay half. That is as proof of out seriousness,” Arifin said.
Arifin added that the price for the take over offered by Shell is far below US$ 1 billion.
