Ministry rejects Shell?s request for incentives

The Ministry of Energy and Mineral Resources has rejected a request from Shell, operator of the Moa block in Maluku Province, for incentives in the development of the block.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar said over the weekend that the company has requested incentives including depreciation period of two years, investment credit facility of 150 percent, and exemption of the gas domestic market obligation.

Arcandra said that the government can?t provide the requested incentives as Shell is still at the stage of about starting exploration, as such there?s no need for incentives. He also suggested the company to convert its current contract into gross split production sharing contract.

Shell through Shell Pulau Moa Pte Ltd holds 100 percent interest in the Moa block under a contract signed in May 2015. The company is planning to start this year geology and geophysics studies in the working area.

Editing by Reiner Simanjuntak