CORRECTION: No decision made on Masela contract extension

(This is to correct earlier report stating the government and BPMIGAS have agreed to extend Masela contract)

By Bernard Loebs & Godang Sitompul

Upstream authority BPMIGAS and the government haven't made any decision to extend the contract of Inpex Corporation on the Masela block, spokesperson of BPMIGAS I Gde Pradnyana told Petromindo.com.

He said the government has approved the Plan of Development (PoD) for the planned floating LNG (FLNG) terminal at the block, including the economic viability calculation of the project (investment payback) after the Masela block contract expires in 2028. No decision has, however been made, to extend its contract on Masela.

Earlier, Petromindo, quoting Gde, said the government had approved the extension of the Masela contract to make the FLNG project economically feasible.

Gde said he had been misquoted.

Inpex's contract on Masela expires in 2028. Under the existing regulation, a production sharing contractor (PSC) may demand a 20-year extension for its contract 10 years before the contract expires.

Industry sources earlier said that Inpex was seeking an extension of its contract.

Lambok Halomoan Hutauruk, Evaluation and Legal Advisory Deputy at BPMIGAS, said Inpex may request an extension of its contract, but BPMIGAS has yet to receive a formal request from the Japanese oil and gas company.

Currently, Inpex is in the process of tendering the Front-End Engineering Design and Engineering, Procurement and Construction for the Masela FLNG project. A number of participants including Chiyoda Corp., Technip, Saipem, IKPT-Petrofac consortium, Tripatra Engineering, Malaysian firm EJ Joint Venture, Indoturbine and JGC have submitted their bids.

Inpex and BPMIGAS are expected to announce the winner of the tender by end of the first half of 2012.

Editing by Johannes Simbolon