Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, says that the government may revoke the Masela Block gas concession held by INPEX Corporation since no progress has been made ever since the concession was issued 26 years ago.
Signals that the government may revoke the Masela Block concession were sent by Bahlil along with the failure of investors, who have completed exploration of 300 oil and gas wells across the country, but have yet to carry out works for production.
“I have written a letter stating that if this year they do not carry out work for production, then I apologize that we will have to revoke their concessions. We will evaluate all oil and gas wells for the good of investors, the people, the nation, and the country,” Bahli said on Thursday, January 30, 2025.
According to him, the measure is part of the efforts to achieve the target of oil production or lifting of up to 1 million barrels per day in 2029. Oil production at the end of last year was only around 600,000 barrels per day (BPD).
Minister of Investment and Downstream/Head of the Investment Coordinating Board, Rosan Perkasa Roeslani, previously said that INPEX Corporation as the operator and majority shareholder of the Masela Block will begin the initial planning process. INPEX will also determine the Final Investment Decision (FID) for the Masela gas project in 2025. The Masela project had existed since 2000 when the Abadi Gas Field was discovered.
According to ESDM, the recorded gas reserves of the Masela Block located in the Tanimbar Islands, Maluku have reserves stored in the block reaching 4 trillion cubic feet. The block contains gas up to 27.9 million cubic feet, with an estimated production of around 9.5 million tons of liquefied natural gas per year and 35,000 barrels of condensate per day.
Indonesia’s oil production in 2024 had fallen by 62.5 percent compared to the 1997 figure of of 1.6 million BPD, with national oil consumption only reaching 600,000 BPD.
Meanwhile, national oil consumption currently has increased to 1.6 million BPD. Indonesia’s status as a net exporter in 1998 has turned into a net importer of 1 million BPD last year.
Bahlil assessed that the sharp decline in oil production is due to the huge number of passive oil wells in the country, which is recorded at 24,000 wells. Meanwhile, 16,000 oil wells that are now still producing are old, some of them are even already 75 years of age.
Efforts to increase production
Bahlil said the government has required 300 oil wells that have completed the exploration stage to start production in 2025.
He added that the government also plans to maximize production at the 16,000 existing wells using Enhanced Oil Recovery (EOR) technology.
“We will conduct an evaluation on the wells, whose exploration have been completed. Entrepreneurs must not control the State, but at the same time, the state must not be cruel to entrepreneurs,” he said.
