Inpex downsizes staff by 40% due to indecision over Masela
Wednesday, March 16 2016 - 04:04 PM WIB
Japanese firm Inpex Corp. has decided to downsize the number of its personnel in Indonesia since the government remains undecided over the Abadi LNG project within Masela block in Maluku province, upstream authority SKK Migas said Wednesday evening.
SKK Migas said in a statement that based on information it received from Inpex, the decision was taken ?because as of Thursday, March 10, 2016, no decision had been made with regards approval for the revised PoD of Masela block that was submitted by Inpex Indonesia in last September.?
SKK Migas said it is worried the measure may lead to layoffs.
The agency added that it had received information from Shell Indonesia that the company?s CEO had told the firm?s engineers in the Netherlands, Kuala Lumpur and Jakarta, who had been working for the Masela project to soon look for new job positions elsewhere in Shell?s global operation.
?As a matter of fact, Inpex Indonesia still much expects a decision will soon be made to approve the PoD. However, Inpex Indonesia says that if the decision is made now and the decision is in line with SKK Migas? recommendation, that is offshore LNG (FLNG), the FID (Final Investment Decision) for the more than US$14 billion Masela project will be delayed by two years to end-2020,.? SKK Migas said.
?SKK Migas express regrets that at the time Indonesia is seeking to promote investment, a large-scale investment next in front of our eyes must be postponed for two years. SKK Migas regrets the fact that the Maluku people must wait for at least another two years before starting enjoying the benefits of the project,? the agency said.
Separately, Usman Slamet, Inpex?s Sr. Communication Manager, said in a statement that first, the firm is still waiting for the government to decide on the revision of the PoD-1 of Masela project and it is expecting the decision to be made a soon as possible; secondly, the firm expects the decision comes in line with the firm?s proposal. Meanwhile, the firm will pursue on the project by finalizing FEED; thirdly, the firm?s manpower should be adjusted to the works now being handled by the firm.
Masela is 65 percent owned by Inpex and 35 percent by Shell.
President Joko Widodo remains undecided over the types of LNG plant ? whether floating LNG or onshore LNG plant ? to be developed to process gas from the Abadi field of the block. Inpex and Shell, supported by SKK Migas and the ministry of energy and mineral resources, support the FLNG option. However, some ministers, particularly Coordinating Minister of Maritime Affairs Rizal Ramli, are strongly opposed to the option, favoring onshore LNG plant.
Experts mostly favor FLNG plant as proposed by Inpex and Shell.
Editing by Johannes Simbolon