Hundreds of Inpex workers may lose jobs

By Febry Silaban

Hundreds of workers of Inpex Indonesia, a subsidiary of Japanese firm Inpex Corp. may lose jobs as a consequence of the government?s indecision over the company?s LNG project in Masela block in Maluku province.

The firm has told upstream authority SKK Migas that it had decided to downsize the number of its workers since the government keeps delaying decision on its project. While what the company meant by ?downsizing? is immediately clear, SKK Migas said in a statement this evening that it is worried that it means ?layoff?.

SKK Migas? Chairman Amien Sunaryadi said during the press conference that at present Inpex Indonesia employs between 350-400 workers. The firm plans to cut the number of its workers by 40 percent to between 90 and 100.

Royal Dutch Shell, Inpex?s partner in the block, has also told SKK Migas that the firm?s CEO has told its engineers dedicated for the project in Jakarta, Kuala Lumpur and the Netherlands to look for other jobs elsewhere in the firm?s global operations. According to Amien, Shell has placed nine engineers in Jakarta, nine in Kuala Lumpur and 25 in the Netherlands to handle the project.

Amien said he has yet to report the situation to the minister of energy and mineral resources, but he has yet to meet the minister of manpower.

He noted however that Inpex will not pull out of Masela. The firm will remain there until its contract expires in 2028. The contract is extendable by 20 years.

Amien explained that when the firm submitted the revision of PoD-1 for the Masela block last September, it expected to gain approval at end-December so that it can make final investment decision (FID) at around end 2018. The firm was waiting for the approval from January through February. On March 19, the firm decided it is impossible to make FID in 2018.

?Even if the PoD is approved now, meaning the government approves the floating LNG option, the FID will only be possible to be made in 2020. If the government approves onshore LNG, the FID will be postponed much longer,? Amien explained.

?International investors have their own ways of thinking. They think about country risk and other factors. At end-2018, the risks are still acceptable. In 2019, Indonesia will hold election. Investors know when they have to make a decision on big-budget projects. Each year has its own risks,? he said.

Editing by Johannes Simbolon