The Abadi gas field project in the Masela Block is delayed in production in 2030. Meanwhile, the Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas still hopes that the onstream schedule will match the development plan.
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| Inpex Masela Ltd and Shell |
The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) asked Inpex Masela Ltd and Shell as the operator of the Masela Block to carry out the Masela Block Liquefied Natural Gas (LNG) investment in accordance with the approved Plant of Development (PoD). The Masela Block LNG project is agreed to be completed and start production by the end of 2027.
The Deputy of Operations for the Special Unit for Upstream Oil and Gas Business Activities (SKK Migas), Julius Wiratno stated that his party continues to push for the project to be completed in accordance with the approved PoD. SKK Migas also said that it had not yet received a revision proposal from Inpex.
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| Inpex |
"SKK Migas to this day continues to push for implementation according to the approved PoD, for immediate production as soon as possible. We have not received a revision proposal from Inpex at all and we are still fighting for acceleration efforts," said Julius.
Julius emphasized that the government through SKK Migas is still encouraging Inpex's investment in Masela, this must be realized immediately. Because some preparatory work has been and is being started, such as the approval of the Environmental and Impact Analysis (AMDAL), metocean surveys, and land acquisition.
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| Takayuki Ueda |
Previously, Inpex CEO, Takayuki Ueda explained, that Inpex is conducting comprehensive size studies such as the introduction of carbon capture, utilization, and storage facilities, known as CCUS.
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| the Masela Block LNG |
The CCUS installation is intended to make the Masela Block LNG project more environmentally friendly, but the project could be delayed until 2030.
"SKK Migas has asked Inpex to immediately revise the POD, if that is what is desired, for us the planning team, in particular, can immediately conduct a review and evaluation," explained Julius.
As is known, currently Inpex Masela Ltd and Shell as the operator of the Masela Block are revising the PoD of the oil and gas working area that is included in the National Strategic Project (PSN). The PoD revision relates to the inclusion of CCUS. This is done so that the assets of the Masela Block in this case the Masela LNG can be said to be competitive because it has green energy requirements.
The majority of Masela Block's participating shares are 65 percent owned by Inpex Masela. The rest is owned by Shell. But Shell has said it will leave the block. However, the plan failed to materialize because there were no investors who wanted to buy Shell shares.
In addition to the Masela Block, SKK Migas also hopes that the Indonesia Deepwater Development (IDD) project located in the Kutai Basin, East Kalimantan, can be completed immediately and start production in the fourth quarter of 2025. The IDD project is a development project for five deep-sea gas fields that are carried out in an integrated manner to meet the gas needs of the domestic market and the Bontang LNG Plant. The IDD project has production reaching 844 MMscfd for natural gas and 27,000 barrels of oil per day (BOPD).
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| the IDD project Chevron |
In the IDD project, Chevron acts as the operator. The company controls 62% of the participating interest or interest (PI). The rest is controlled by ENI with a 20% stake and Sinopec Group 18%. However, the continuation of this mega project is still uncertain. Because, since 2020, Chevron declares to discontinue the IDD project.
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| ENI |
"For this IDD project, the update now is that the operator Chevron Pacific Indonesia (CPI) is still looking for a replacement operator," said Julius.
DIFFICULT MISSION
On the other hand, the government has targeted oil lifting of 1 million BOPD and gas of 12 BSCFD by 2030. However, this target is impossible to achieve without new large-scale oil and gas projects. Previously, the government through the Directorate General of Oil and Gas together with SKK Migas and cooperation contract contractors [KKKS] had identified the planned production profile of each KKKS and it was known that total oil production would reach 1 million BOPD in 2030.
The government has also prepared several strategies to increase production, namely routine work programs such as infill drilling/step out in existing fields, and workover/well service. In addition, acceleration of the transformation of resources into production is also carried out, by accelerating new PoDs and pending PODs.
An energy and oil economist from Trisakti University Pri Agung Rakhmanto said that without a new large-scale oil and gas project the oil lifting target of 1 million bopd would not be possible to achieve.
"To achieve the oil and gas production target of 12 MMscfd and 1 million BOPD, there needs to be a new project on a large scale," said Pri Agung.
According to him, efforts to increase the production of existing oil and gas fields are not sufficient to achieve the government's ambitious targets.
“If it's EOR, we need EOR on a large-scale oil and gas field. The current EOR has just been done on a small scale. EOR and other efforts can only stop the rate of decline in production in existing fields so that it doesn't decline further," he explained.
Pri Agung is of the view that this 1 million BOPD is not worthy of being called a target because there is no clarity on the details of the work program. For example, from which field the production target was produced.
The Executive Director of the Reforminer Institute Komaidi Notonegoro also said the same thing. According to him, without finding large reserves, the target of 1 million BOPD is just wishful thinking.
"To be able to reach 1 million BOPD, it is calculated that additional production from large-scale oil and gas fields or the majority is generated from large-scale investments made by major International Oil Companies [IOCs]," said Komaidi.
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| Jambaran Tiung Biru in Central Java |
Currently, Indonesia has four giant oil and gas projects, namely, Jambaran Tiung Biru in Central Java, the Abadi Field in the Masela Block in the Arafura Sea, IDD in the Kutai Basin in East Kalimantan, and Tangguh Train 3 in Papua. Unfortunately, these projects are expected to be completed longer than the target set. The reason is, recently, the foreign oil and gas giant that manages this mega project has stated that it will leave Indonesia.
Bisnis Indonesia, Page-4, Wednesday, February 23, 2022
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