Inpex, Shell waiting for formal letter about Jokowi?s decision

By Febry Silaban

Inpex Corp. and Royal Dutch Shell, the contractors of the Masela block in Maluku province, declined on Wednesday to comment about President Joko Widodo?s decision on the LNG project of the block, saying they are waiting for a formal letter from the government on the issue.

The President announced earlier today that he has decided to choose the onshore option for the development of LNG plant for the block, saying an onshore LNG plant will bring greater benefits for the economy of the country and the areas near the block. The President thus rejected the floating LNG (FLNG) option proposed by Inpex and Shell in its revised Plan of Development (PoD).

The President also instructed the ministry of energy and mineral resources (MEMR) and SKK Migas to follow up his decision. Minister of Energy and Mineral Resources Sudirman said his office will soon send a formal letter asking Inpex to revise the Masela PoD in line with the President?s decision.

?We can?t make any comments for the moment as we are still waiting for an official notification from the MEMR regarding the proposal to revise the PoD,? Usman Slamet, Sr. Communication Manager of Inpex Indonesia, said in a text message.

Shell Indonesia made a similar statement.

"We are unable to comment now as we are waiting to receive a formal letter from the Government of Indonesia. We look forward to better understanding and discussing the implications of the decision with the relevant government agencies," Haviez Gautama, GM External Relations of Shell Indonesia, said in a text message.

The President?s decision has thus far drawn mixed reactions from the business community.

Aussie Gautama, former Planning Deputy of SKK Migas now working for state owned oil and gas firm PT Pertamina, said he was disappointed over the decision.

?I am disappointed in seeing the results of two-year technical and economic studies, which were executed in a neutral and professional way, have been beaten by jargons, agitation, propaganda, even slanders,? Aussie said.

Firlie Ganinduto, Vice Chairman of Permanent Committee on Oil and Gas Upstream Activities at the Indonesian Chamber of Commerce and Industry (Kadin), welcome the decision. This is despite the fact he is among the proponents of FLNG option.

?We welcome the decision. That means MEMR and SKK Migas need to work hard now to realize the Masela project. We don?t want the project to be stalled. Secondly, I believe the decision was taken with the purpose of developing the domestic economy. The goal must be achieved. The project should be supervised in favor of domestic industry,? he said.

Syamsu Alam, Upstream Director of Pertamina, also welcome the decision.

?I think the decision has been made (by the President) after considering all aspects comprehensively. In principle, the issue is not whether to build production facilities onshore or offshore, but how to utilize the natural resources (gas) maximally for the national welfare and energy resilience.

?A decision has been made. It?s time now to focus on realizing the project as well as possible,? he said.

Editing by Johannes Simbolon