SKK Migas: Inpex, Shell shall not pull out of Masela

By Febry Silaban

Upstream authority SKK Migas said Inpex Corp. and Royal Dutch Shell, the contractors of Masela block in Maluku province, will not pull out of the block despite the rejection of their revised Plan of Development (PoD)-1 by President Joko Widodo.

The President announced on Wednesday that he had decided that the LNG plant for the block should be built onshore, rather than floating in the Arafura Sea as proposed by Inpex and Shell in their PoD.

?At 6 pm yesterday, SKK Migas team together with Masela team held a meeting with Inpex and Shell team. We told Inpex face-to-face that the President?s decision is that the LNG plant should be built onshore,? SKK Migas? Chairman Amien Sunaryadi said.

SKK Migas asked Inpex to accept the decision and prepare plan to revise the PoD based on onshore scheme, including the new timeline of the project.

?We told them that formalities will follow,? he said.

?After discussion, SKK Migas concluded that Inpex and Shell has no plan to pull out of Masela block. They will stay at Masela, They only need time to revise their working plan for onshore,? Amien said.

Meanwhile, Minister of Energy and Mineral Resources Sudirman Said there are several steps that have been or will be taken to follow the President?s decision.

First, Sudirman said he will send a letter to SKK Migas in response to the recommendation from the agency for approval of the PoD. In the letter, the minister will ask SKK Migas to return the revised PoD-1 to the contractors and ask them to revise the PoD in line with the onshore method as decided by the President.

Second, SKK Migas has held a communication with the investors in order to explain the government?s decision.

Third, the minister has assigned SKK Migas to hold communications with the regional government (of Maluku) in order to prevent continued polemics on the issue. SKK Migas should ask the governor to willingly accept the decision.

?I want to underline that the execution of the project is still eight or ten years from now. It is not wise for the public to keep polemicizing on the issue. There should be a reconciliation and let the investors to recalculate the project,? Sudirman said.

Fourth, Sudirman said he would ask SKK Migas to tightly supervise the revision process so that the Final Investment Decision will not be postponed for a long time.

Editing by Johannes Simbolon