Coordinating Minister Airlangga Alludes To The Slow Development Of tThe Masela Block

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Doc. Coordinating Ministry for the Economy)

BALI - Coordinating Minister for Economic Affairs, Airlangga Hartarto, mentioned the slow development of the Masela Block, in Maluku. In addition, for the Masela Block Abadi field, no one has worked on the project.

As is known, since the plan of development (PoD) was approved by the government on July 16, 2019, until now the project managed by Inpex Corporation has not made significant progress.

"We see that several projects, including the Masela project, appear to be experiencing delays", he said at the 3rd International Convention on Indonesian Upstream Oil and Gas (IOG) 2022, at BNDCC, Nusa Dua, Bali, Thursday, November 24.

Airlangga also asked for an assessment of the cause of the slow pace of construction of the Masela Block. If it's due to regulations, Airlangga encourages improvements. Likewise, if a problem is found on the other side.

"If it is seen that it is not enough to encourage the growth of the oil and gas industry, of course, it is possible to see whether the existing regulations are effective enough to encourage them. And if they are not effective, of course, revisions are needed to improve", he said.

In addition, Airlangga also mentioned the domestic oil and gas production target of up to 1 million barrels per day in 2030. Airlangga assesses that the target has not been realized.

"Increasing domestic oil and gas production is our shared goal and this has been discussed for years, the target of 1 million barrels per day, but current production continues to decline", he said.

Therefore, Airlangga also encouraged the need for steps that must be taken by SKK Migas with the investment climate situation and incentives.

"This can be better while also encouraging the energy transition that leads to new and renewable energy", he explained.

Airlangga said that the discussion on this matter needed serious attention. Both in terms of fiscal and non-fiscal incentives. The goal is to improve the investment conditions for the upstream oil and gas industry to run conducive.

China to Malaysia vying for entry

As previously reported, the oil and gas company (Migas) from China, PetroChina Company Ltd. to an oil and gas company from Malaysia, Petronas, is interested in entering the Masela Block, which is located in the Tanimbar Archipelago, Maluku Province, Indonesia. Following that, the departure of Shell originally wanted to work on the project.

The interest of Chinese companies in Malaysia was confirmed by the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Dwi Soetjipto.

Dwi said there are about 4 companies that have been in talks. However, Dwi has not disclosed the details of which companies are interested in entering. Regarding the plan to enter energy companies into the Masela Block, Dwi emphasized that it needed to be communicated with Inpex from Japan. This is because Inpex is an operator in the Masela Block.

"It's quite a lot, for example, our etiquette indicates there are 3 or 4, yes, but each has its own requirements that must be collaborated with Inpex itself", he said on the sidelines of the IOG Convention 2022, in Nusa Dua, Bali, Wednesday, November 23.

The latest is a company from China, Petrochina which is reportedly interested in working on the Masela Block. Dwi confirmed the news, including the news that Petronas was equally interested.

"(Petrochina) is included. Petronas is included", he explained.

Furthermore, Dwi targets that by the end of this year there will be a final decision on companies entering the Masela Block, narrowing Shell's 35 percent participant interest.