Shell and Chevron are Leaving, but Indonesia Hopes to Double Gas Production
Indonesia hopes that the recent withdrawal of companies from two long-delayed gas projects will give a boost to their development. The country’s leadership wants to double gas production by 2030, to 12 billion cubic meters. foot per day.
The Masela and IDD projects, whose total cost is estimated at $27 billion, are for Indonesia something like an attempt to revive gas production, which has clearly not been doing well in recent years.
The key obstacles for the two projects are restrictions on domestic gas prices in the country, restrictions on gas exports, and high costs of capturing and storing CO2.
Last month, Shell said it would sell its stake in the Masela project to Indonesian Pertamina and Malaysian Petronas, while Chevron would sell its stake in the IDD project to Italy’s Eni.
The reason for such changes among foreign investors in Indonesia is quite serious. The old ones didn’t want to and couldn’t manage, so new ones are needed. Domestic gas demand is expected to grow by 19% in 2023 to 7.6 bcm. foot. per day in 2030 (data from the Institute for Essential Services Reform). But it would be nice to revive exports, which, according to Kpler observations, have halved in Indonesia over the past 10 years (previously the country was in the TOP-5 LNG exporters).
