Jakarta, CNBC Indonesia – PT Pertamina (Persero) admits that the assets of the Masela Block, which is located in the Tanimbar Islands Regency, Maluku, are quite strategic, especially to meet domestic natural gas needs.
PT Pertamina (Persero) SVP Strategy & Investment Daniel S. Purba views the company’s plan to acquire the Masela Block because the assets in the block are strategic enough to meet domestic gas needs.
However, according to him, there are still challenges to managing this “giant” gas block, especially related to the process of monetizing gas reserves in this block.
“The answer is not easy to monetize the relatively large gas reserves in Masela. So in terms of reserves it is quite strategic for Indonesia, but for monetization it is not easy from a technological aspect from a funding aspect and from a buyer’s perspective,” said Daniel in Jakarta, quoted Monday (27) /2/2023).
Furthermore, Daniel said, for gas monetization, his party must first start conducting a market survey. This is done to ensure that gas production in the Masela Block can be absorbed as optimally as possible.
“Before entering the market, we conducted a feasibility study. So, quite a lot of challenges from Masela are aspects of the technology that we can say are the first in this case interested in getting into it because the risk is quite high. This complex funding takes time and this is still in progress,” he said.
Previously, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) conveyed that PT Pertamina (Persero)’s plan to enter into the management of the Masela Block was getting closer, by taking over 35% of Shell’s participating interest in this block.
In fact, this state-owned oil and gas company will submit a bid proposal in April.
Head of SKK Migas Dwi Soetjipto said that his party is currently still waiting for confirmation from Pertamina and its new consortium to replace Shell’s position in the Masela Block. Plus the discussion regarding the inclusion of the Carbon Capture Utilization and Storage (CCUS) facility in the jumbo project.
“The transfer of operatorship is that Pertamina will only submit its proposal in April, but apart from that discussions about the project are continuing, especially because of the entry of CCUS,” said Dwi when met at the Ministry of Energy and Mineral Resources Building, Tuesday (21/2/2023).
It should be noted that this giant gas project worth US$ 19.8 billion or around Rp. 285 trillion (assuming an exchange rate of Rp. 14,400 per US$) is targeted to produce 1,600 million standard cubic feet per day (MMSCFD) of gas or the equivalent of 9.5 million tonnes of LNG per year (mtpa) and pipeline gas of 150 MMSCFD, and 35,000 barrels of oil per day.
This project is targeted to be operational in 2029, retreating from the initial plan in 2027. This is part of the National Strategic Project (PSN) launched by President Joko Widodo (Jokowi).
The participating interest in the Masela Block is currently held by Inpex Masela Ltd (65%) and Shell (35%). The operator or manager is Inpex. However, since several years ago Shell has been planning to get out of this giant gas project. (wia)