Saturday, December 28, 2024

Pertamina Hulu Energi sets IDR 86.26 trillion Capex to acquire rights for Masela block

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Julian Isaac

Journalist

yan

Editor

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PT Pertamina Hulu Energi (PHE) has allocated IDR 86.26 trillion (US$ 5.7 billion) Capital expenditure (Capex) in 2023to acquire Shell’s 35% participating interest (PI) in the Liquefied Natural Gas (LNG) Abadi Masela block.

PHE – a subsidiary of state-owned energy giant PT Pertamina in the upstream oil sector, which was established in 2007 – has engaged in upstream oil and gas exploration and domestic and international production activities. The company has been active in various exploration and production projects, including the Mahakam block in East Kalimantan, the Offshore North West Java (ONWJ) block in the Java Sea and the Iraq Kurdistan region.

Acquisition of Masela Block

As part of PHE’s work plan and company budget (RKAP) in 2023, the Capex will be allocated for the acquisition of the Masela Block in the Tanimbar Islands, Maluku. This year’s Capex increased by 78.12%, compared to the realization budget in 2022 of IDR 48.47 trillion.

Pertamina CEO Nicke Widyawati was reluctant to go into details on the investment allocation aimed at taking the 35% management rights that Shell wanted to relinquish in one of the most expensive oil and gas projects in the world today.

“There is nothing to convey yet, it is not allowed, we are bound by a non-disclosure agreement (NDA),” she added.

Read also: This is why oil and gas giants leave Indonesia

Data from the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) revealed that Shell has disbursed US$ 875 million to acquire a 35% PI in the Abadi Masela block and disbursed an investment of US$ 700 million, bringing the total funds spent by Shell to develop the field to reach US$1.4 billion. Pertamina has prepared US$ 6.3 billion in capital for the Masela block for the next 5 years.

The Masela block is also being added with a Carbon capture, utilization and storage (CCUS) facility, making it more competitive and interesting for investors and participate in the acquisition process.

Risk in the Masela block

There is still a problem with the CCUS facility at the Masela block even though it is still in the process and in progress.

“Right now, there is still the issue of how to make this CCUS, which was proposed by Inpex [Japanese oil company], to become a part of the petroleum operation. It is still in the process, and of course, the licensing is still under review,” said SKK Migas Chairman Dwi Soetjipto during a press briefing on January 19, 2023.

Julian Isaac

Journalist

yan

Editor

 

Interview

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