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The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said that a new competitor in the takeover of Shell Upstream Overseas Ltd.'s 35% stake has decided to leave the Masela Block.
The presence of Petronas has increased the number of potential investors in the Masela Block. Because, previously, Pertamina-INA-Medco and ExxonMobil were reportedly interested in taking over Shell shares. Deputy Head of SKK Migas Fatar Yani Abdurrahman revealed that Petronas has just expressed its interest in replacing Shell in the Masela Block.
"After someone made an offer, Petronas was interested in joining, but we are currently studying it. We will discuss this," said Fatar.
Currently, Petronas is only waiting for the government's commitment. However, SKK Migas cannot confirm whether Petronas will enter with partners or alone. What is certain, "Petronas has expressed its interest in investing in this LNG project with a capacity of 9.5 million tons per year," said Fajar.
SKK Migas previously targeted Pertamina to submit an offer to Shell for the acquisition of a 35% stake in the Masela Block this November.
Until now, the filing of this interest has not been carried out. Pertamina's consortium is currently still being evaluated with various options.
Potential replacement investors for Shell in the Masela Block must invest around US$ 1.4 billion if they are interested in taking over shell shares. The amount of this investment does not include the funding requirement of US$ 6.3 billion for the first five years of development as capital expenditure.
In addition, with the addition of the Carbon Capture Utilization & Storage (CCUS) project to the Masela project, there is a potential for additional investment of around US$ 1.2 billion to US$ 1.4 billion.
Fatar emphasized that learning from Shell's release in the Masela Project, SKK Migas is prepared to strengthen the existing provisions in the future oil and gas block Plan of Development (PoD).
Fatar revealed that SKK Migas felt like it had been lied to by Shell leaving the Masela Block. Moreover, "When the POD, we provide incentives, but the conditions are poor. For example, until the commercial production is not allowed to leave the Masela Block," said Fatar.
The Masela Block project is the first very large-scale project in Indonesia. This also makes the government happy. But unfortunately in the terms and conditions of the contract, there is no protection for the project so that investors don't just run away.
So, in the future, SKK Migas is targeting regulations to provide protection so that investors do not leave the project until the commercial production stage. This provision applies to projects that receive incentives. As a result of Shell's escape, the construction and development of the Masela Block was delayed. Moreover, the release of management shares or Shell's participating interest requires approximately 18 months for a 35% stake in the Masela Block.
Kontan, Page-12, Wednesday, Nov 16, 2022
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