Indonesian state-owned oil and gas company PT Pertamina, and Malaysian oil and gas company Petronas have officially taken over 35% shares in the participation rights of the LNG Blok Masela project previously owned by Shell.
The divestment of the participation rights was formalized through a signing of a sales and purchase agreement (SPA) between Pertamina, Petronas, and NBD Asia Pacific Shell.
The sales and purchase agreement was signed by PT Pertamina Hulu Energi’s CEO, Wiko Migantoro, Petronas Upstream’s CEO, Datuk Adif Bin Zulkifli, and the Director of Finance for Divestment and Acquisition at NBD Asia Pacific Shell, Kuo Tong Soo.
Masela development partnership with Inpex
In addition to the signing of the sales and purchase agreement, a memorandum of understanding for the development partnership of Blok Masela was signed by PT Pertamina’s CEO, Nicke Widyawati, and Inpex Corporation’s CEO, Takayuki Ueda.
These signings took place at the opening event of the IPA Convex at ICE BSD Tangerang on Tuesday (25/7).
The signing ceremony was also witnessed by the Minister of Energy and Mineral Resources, Arifin Tasrif, the Director-General of Oil and Gas, Tutuka Ariadji, the Head of SKK Migas, Dwi Soetjipto, and the President and CEO of Petronas, Tan Sri Tengku Muhammad Taufik.
Nicke Widyawati, CEO of Pertamina, stated that Pertamina’s involvement in Blok Masela is to secure the upstream oil and gas supply and meet the national energy needs.
“In addition to managing existing fields, a strategy is needed to develop new fields, one of which is the Abadi Field in Blok Masela,” said Nicke.
In the management composition of Blok Masela, Pertamina holds a 20% participation right, while Petronas holds a 15% ownership right. Pertamina and Petronas will collaborate with Inpex Corporation as the operator and majority shareholder of Blok Masela.
The next step
The Head of SKK Migas, Dwi Soetjipto, stated that the next step after the divestment is the completion of the environmental impact analysis (Amdal) and the revision of the Plan of Development (PoD) for Blok Masela.
The PoD revision is intended to accommodate the use of Carbon Capture Storage (CCS) technology in the development of the LNG Blok Masela.
Dwi also mentioned that they will soon conduct a bidding process for the detailed design or front-end engineering design (FEED) of Blok Masela. The FEED activity is expected to commence actively by the end of this year or early next year.
As part of the divestment, Pertamina is obligated to make two separate payments to compensate for the release of Shell’s participation rights.
According to Dwi, the divestment price of Shell’s 35% participation rights in Blok Masela is priced below US$ 1 billion. “With this signing, the first payment should be made concurrently,” said Dwi.
PT Pertamina Hulu Energi’s CEO, Wiko Migantoro, stated that he is not yet able to disclose the specific amount of capital that Pertamina is providing for the share divestment from Shell. However, he mentioned that it was lower than US$ 1 billion.
