26-6-2023 (KUALA LUMPUR) Pertamina and Petronas, state energy firms from Indonesia and Malaysia respectively, have announced plans to jointly take over Shell’s share in the Masela gas project in Indonesia. The deal is expected to help move the project forward after years of delay, and comes in the context of sluggish oil and gas production in Indonesia due to depleting blocks as well as delays to major new projects. The Masela project, led by Japan’s Inpex, aims to reach an annual LNG production volume of 9.5 million metric tons at its peak, and Pertamina and Petronas are preparing for a sales agreement with Shell. The deal is expected to be concluded within a month.
Indonesian authorities are keen for the companies to complete the deal as a matter of urgency, as time is ticking for the country to tap its massive hydrocarbon reserves while countries worldwide move towards non-fossil fuels to reduce emissions. However, the country’s Energy Minister, Arifin Tasrif, stated that hydrocarbons will remain an important part of Southeast Asia’s energy mix and achieving net-zero emissions targets should not be “at the expense of economic growth or vice versa”.
Separately, Eni, an Italian oil and gas company, has been in discussions to take over Chevron’s stake in the Indonesia Deepwater Development (IDD) gas project for a long period, according to Arifin. The government expects negotiations over the operation of the project to be concluded in July. The IDD project, located in Makassar Strait, is 62% controlled by Chevron.
In the South China Sea, Indonesia has approved a $3 billion development plan for the Tuna gas field, operated by Premier Oil Tuna, a unit of London-listed Harbour Energy. However, sanctions from the European Union and Britain have impacted Tuna’s development plan as the block is partly controlled by Russia’s Zarubezhneft, according to Arifin. Premier will now seek new partners to replace Zarubezhneft.
