Maluku obtains 10% interest in Masela block

The Ministry of Energy and Mineral Resources has decided to allocate 10 percent interest in Masela block to Maluku province where the block is located, Kontan reported on Friday.

Director for Oil and Gas Upstream Management at the ministry, Naryanto Wagimin, however, said that after meeting with the provincial administration, the ministry must also meet with regents in the province to get their agreement on the 10 percent interest allocation, to make sure that that no regencies will demand for additional shares in the future.

Afterward, Naryanto said that the ministry will deal with the demand of the East Nusa Tenggara province, which has requested for a 5 percent stake in the Maseal block. While Naryanto did not say whether the ministry would entertain the request, it is unlikely the government would approve it considering that the block is located within the Maluku territory although bordering with East Nusa Tenggara.

The Masela block is 65 percent owned by Japanese Inpex Corp as the operator, while the remaining 35 percent is held by Shell.

Inpex has requested for an extension of the current contract which expires in 2028, for another 20 years as the company aims to make huge investment in developing the Abadi gas field in the block.

The Masela block is expected to produce 2.5 million tons of gas and 8,400 barrels of condensate per year, starting 2018 or 2019. (*)