Inpex and Shell are still discussing the transfer of 30% of Shel's participating interest
Inpex Corporation's management is committed and believes that the Masela Block project continues, despite news of the departure of Royal Dutch Shell (Shell) as the owner of 35% participating interest in the block.
Act Corporate Communication Manager of Inpex Masela Moch N Kurniawan said, at this time his side focused on preparing the development of the Abadi LNG project, Masela.
the Abadi LNG Gas Field
"As operators of the Abadi LNG Project and supported by the Government of Indonesia, we believe this project will continue. We are actively working on implementing the plan of development (POD) approved by the Government of Indonesia," said Kurniawan.
However, he did not want to detail the continuation of discussions between Shell and Inpex. Currently, Inpex as the largest shareholder in the block is looking for a replacement for Shell.
In the Masela Block, Shell has a participating interest (PI) of 35%. while Inpex Corporation controls 65% PI. Later, the local government will receive a 10% allotment of participation rights, which will be taken from ownership of Shell and Inpex.
The reason for Shell's withdrawal from the Masela Block development project was due to the condition of their cash flow which was affected by the corona pandemic (Covid-19). Shell decided to focus on other projects they were working on in Indonesia.
Previously, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said that the plan to transfer participation rights by Shell still had to obtain the approval of the Minister of Energy and Mineral Resources (ESDM).
SKK Migas Deputy for Operations Julius Wiratno said the government did not interfere in discussions between Inpex and Shell. However, SKK Migas is still guarding to ensure that the discussion does not hamper the implementation of the Masela Block project.
"All the PI transfer processes must be based on the approval of the Minister of Energy and Mineral Resources. Regarding valuation and all business discussions between investors, we are not involved at all," said Julius
He added, Shell did not reveal another reason for the decision to release the participation rights in the Masela Block. Shell only stated that the distressed cash flow condition was the main reason for the decision. The Masela Block Abadi Project this year has entered the approval stage of an analysis of environmental impacts (Amdal).
Until April 2020, the process had reached 45.33396 from the target of 47.96% for the month. The Masela Block Project has also obtained a Decree (SK) for the Determination of Land Procurement Locations for the Abadi LNG auction port on June 1, 2020. The refinery is planned to be built in the Tanimbar Islands, Maluku.
Inpex has begun the front end engineering design (FEED) process for onshore LNG projects, floating production and offloading (FPSO), export gas pipelines, and subsea umbilical risers; and flowline (SURF). The project is targeted to operate in the second quarter of 2027, a year later than the initial target.
Kontan, Page-13, Thursday, July 9, 2020
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