Govt sets condition for Masela PSC extension

By Febry Silaban

A senior official of the Ministry of Energy and Mineral Resources said the ministry will put into consideration the request for an extension of the contract on Masela PSC offshore Maluku if the owner of the block has signed a gas sales agreement (GSA) or Heads of Agreement (HoA).

Under the existing regulation, oil and gas contractors may apply for contract extension as of 10 years before the expiry of their contracts. The operator of Maseala, INPEX, a Japanese firm, has however applied for a contract extension despite the fact that its contract expires in 2028 or 14 years from now.

"Thus by law, the firm is not allowed yet to ask for contract extension. Still, we shall put the request for contract extension if they have signe a GSA or HoA,? Widhyawan Prawiraatmadja, Head of Performance Control Unit at the ministry, said.

He added that he in cooperation with the directorate general of oil and gas will look into the continuity of the Abadi LNG project in Masela block.

The block is operated by INPEX Masela with a 65 percent participating interest in partnership with Shell Upstream Overseas Services (I) Limited, a subsidiary of Royal Dutch Shell plc, which holds a 35 percent participating interest.

Both firms plan to develop a floating LNG plant to process gas from Abadi field of Masela. They however consider the project is unfeasible unless the contract is extended.

Editing by Johannes Simbolon