Tuesday, 15 October 2019 | 05:33 WIB

Masela Block PoD May Attract Oil-Gas Investments to Indonesia

Masela Block PoD May Attract Oil-Gas Investments to Indonesia (special)

JAKARTA, NETRALNEWS.COM - The finalization of the discussion on the revision Plan of Development (POD) for the Abadi LNG at Masela Block is believed to be able to attract global investor interest in Indonesia's oil and gas sector.

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Dwi Soetjipto, revealed that the POD's approval is expected to be realized on June 27, 2019, so that this proves that national oil and gas investment does not fade.

Previously, SKK Migas and INPEX Corporation had signed the Head of Agreement (HoA) of the Abadi LNG Project, the Masela block on June 16, 2019 and INPEX had submitted a revised POD on June 20, 2019.

"The investment that reaches US$ 20 billion is not a small value, and shows we are still attractive for oil and gas investment. Moreover, the project is in eastern Indonesia. In addition, it is special that the Abadi Field LNG Project is happening in the deep sea, "Dwi said.

The realization of INPEX investment in the Masela Block not only contributes to the increase in national oil and gas production, but also encourages other effects, namely an increase in labor, the emergence of supporting industries, and exploration potential around the Masela Block.

The development of the Abadi Gas Field, the Masela Block is also special considering that this national strategic project occurs in Eastern Indonesia. Previously, another strategic oil and gas project realized in the area was the Tangguh LNG Project which was operated by BP Indonesia.

For information, the Abadi Field LNG Project in the Masela Block is the first large-scale integrated LNG project operated by INPEX in Indonesia.

The revised development plan is based on a land LNG development scheme with a liquefied natural gas production capacity of 9.5 million tons per year.

Dwi added, this investment of US $ 20 billion represents the largest amount of Foreign Direct Investment (FDI) in a project throughout the history of the Republic of Indonesia. This shows that the investment climate in Indonesia is very conducive and is expected to encourage other investors to invest in Indonesia.

Separately, the Executive Director of the Reforminer Institute Komaidi Notonegoro, revealed that the completion of the discussion of the development plan took place after INPEX gained economic certainty over the Masela Block Abadi LNG project.

He hoped, after the POD was passed there would not be much discussion to be carried out between the KKKS and the Government. Even if there are only administrative ones.

"I think it will provide a positive sentiment for investment activities in Indonesia, especially oil and gas investments. The hope is that positive sentiment will have a positive influence on the strategic oil and gas project, one of which is the IDD (Indonesian Deepwater Development) project, "he said in a written statement on Monday (6/24/2019).

According to him, the extension of the Masela Block management contract until 2055 by the Government is correct. This is to provide space for the KKKS.

As is known, INPEX also includes management extension documents to make the project more competitive because it considers the long-term production prospects.

With the new round of discussion on the development of the Abadi LNG, the Masela Block, Komaidi added that the government has positioned itself as a business facilitator with global investors.

The government has learned a lot, that delays in decisions have an impact on additional investment that drives project costs more expensive.

"If the government can be on time, basically it's already a separate incentive. It's better to be on time than to have to provide incentives that are only to compensate for the delay in decision making, "said Komaidi.