Pertamina and Petronas Aim to Replace Shell in Masela Gas Project
Indonesian and Malaysian state-owned energy companies Pertamina and Petronas plan to jointly buy Shell’s stake in Indonesia’s Masela gas project.
This was stated by the Minister of Energy of Indonesia A. Tasrif on the sidelines of the Energy Asia conference in Kuala Lumpur.
Companies should soon determine the scheme of joint work. The deal is expected to close within a month.
Indonesia has seen sluggish oil and natural gas production in recent years due to block depletion.
New major projects, incl. Masela (also known as Abadi LNG) and Indonesia Deepwater Development (IDD) are facing delays as giants such as Shell and Chevron Corp announced exits as part of their global strategies.
Malaysian Prime Minister A. Ibrahim said that hydrocarbons will be an important part of the energy mix of Southeast Asia, and the achievement of zero emission targets should not come at the expense of economic growth, or vice versa.
Project Masela
- Masela block:
– located in the Timor Sea,
– has the largest natural gas reserves in Indonesia,
– includes the Abadi gas field discovered in 2000; - as part of the development of the field, it is planned to build:
– onshore LNG terminal with a capacity of 9.5 million tons/year,
– carbon capture and storage (CCS) installations.
The project is controlled by the Japanese energy company Inpex Corp, which owns a 65% stake in the Abadi LNG project, the remaining 35% stake belonged to the British-Dutch oil and gas company Shell.
Shell has been looking to get rid of its stake in the Masela project since 2019, and the Indonesian government has been actively looking for investors
On May 30, 2023, it was reported that the Malaysian Petronas claims a stake in the British-Dutch oil and gas company.
On June 6, 2023, Pertamina CEO N. Vidyawati stated that the company had bought back Shell’s shares in the Masela project.
Indonesia Deepwater Development
- located in the Makassar Strait;
- includes gas fields within Kutei Basin:
– The 1st phase of the IDD project involves the development of gas reserves of the Bangka field,
– The 2nd phase of the IDD includes the development of the Gendalo-Gehem fields.
Chevron holds a 62% interest in the Bangka development, and a 63% interest in the Gendalo-Gehem project.
The company announced its withdrawal from the project in 2020 due to its uncompetitiveness in the global upstream asset portfolio.
On June 23, 2023, it became known that the Italian Eni (a minority partner of Chevron in IDD along with the Chinese Sinopec) is in talks to acquire a stake in the American company.
The government expects completion of negotiations on the project in July.
Tuna deposit
In 2023, Indonesia approved a plan to develop the Tuna gas field in the South China Sea.
The estimated investment is about 3 billion US dollars.
The operator of the project, with a 50% stake, is the British Premier Oil Tuna (part of Harbor Energy), another 50% belongs to ZN Asia Ltd. (subsidiary of the Russian Zarubezhneft).
It is noted that the plan for the development of the field was affected by sanctions from the EU and the UK, since the block is partially controlled by a Russian company.
According to A. Tasrif, Premier Oil Tuna is currently one has to act first of all independently, at the same time looking for new partners to replace the old one (meaning Zarubezhneft).
At the same time, on April 20, 2023, a report by ZN Asia, a subsidiary, stated that Zarubezhneft plans to start gas and gas condensate production at the Tuna block in Indonesia in 2025.
