Global Investors Get Out of the Jumbo Oil and Gas Project

The future of energy investment in the country is threatened to fade. One by one foreign investors send signals that they will leave the jumbo oil and gas project in Indonesia. The latest news is that PT Chevron Pacific Indonesia is unlikely to continue the development of the Phase II Indonesia Deepwater Development (IDD) project in the Kutai Basin in Kalimantan Tmur.

PT Chevron Pacific Indonesia

The oil and gas company from the United States claimed to have no capital to develop the Phase II IDD project. This is because the IDD project is not a priority and is not included in the global Chevron Group portfolio.

the Phase II IDD project

Corporate Communication Manager of PT Chevron Pacific Indonesia, Sonitha Poernomo, revealed that the Phase II IDD project could not compete for capital in Chevron's global portfolio. Therefore, Chevron is ready to exit the US $ 5 billion project.

Sonitha Poernomo

"We believe this project will have value for other operators," said Sonitha Poernomo.

IDD is a deep sea gas project developed by Chevron Indonesia Company (Cico) through four production sharing contracts, namely PSC Ganal, Rapak, Makassar Strait and Muara Bakau. There are five gas fields ready to be developed, namely Bangka Field, Gehem, Gendalo, Maha and Gandang.

the Masela Block

Chevron's intention to leave the energy project adds to the list of foreign investors with plans to leave. Not long ago, Royal Dutch Shell (Shell) planned to sell Participating Interest (PI) at 35% in the Masela Block. The investment value of the gas block is around US $ 19.8 billion.

Royal Dutch Shell (Shell) 

Another foreign investor who wants to leave is Japan's Mitsui Corp. They plan to leave the Paiton power plant project, East Java. Mitsui holds 45.59 shares in the 2,045 MW power plant. Regarding the potential of the IDD project, Soenitha said, in fact the Kutai Basin was still an attractive hydrocarbon area. 

       Therefore, Chevron is confident that other operators can continue to develop. Until now, Chevron along with the government and potential partner partners have continued to establish communication to find solutions for the development of the IDD Block.

Eni

In this project, Chevron is the operator and majority shareholder of 63%. The remaining Eni, Tip Top, PT Pertamina Hulu Energi and Muara Bakau partners. Development of IDD Phase II includes the Gendalo-Gehem Field. Both fields will each have a floating production unit. 

     Discussion on Chevron's plan to leave the IDD Block has been busy since the beginning of this year. The signal is visible from Chevron's attitude of reluctance to provide a revised report on the IDD Block's development plan.

SKK Migas has not yet received certainty. Even though there are already several potential investors who have the potential to replace Chevron in the jumbo gas project. Acting Head of the SKK Migas Program and Communication Division, Susana Kurniasih, is still waiting for Chevron's official information. SKK Migas has written to Chevron related to the request for an explanation of Chevron's interest in phase II.

"The letter has been sent this week, so it takes time to wait for the answer," explained Susana Kurniasih, who was a former Voice Update Update journalist.

Dwi Soetjipto

The Head of SKK Migas, Dwi Soetjipto, explained that his party had continued to urge Chevron about the certainty of the continued management of IDD.

"We are still waiting for the Chevron report. Of course this should not be protracted," said Susana Kurniasih.

Hulu Migas practitioner, Tumbur Parlindungan assesses that there are several possibilities that make Chevron out of the IDD project. First, global conditions. Second, the problem of the transfer of management of the Rokan Block from Chevron to Pertamina. Third, the oil and gas investment climate in Indonesia might be considered unattractive for Chevron.

Kontan, Page-1, Friday, July 24, 2020