SKK Migas sends back Chevron?s PoD for IDD project
Thursday, June 23 2016 - 01:51 AM WIB
Upstream authority SKK Migas has sent back the revised Plan of Development (PoD) for Gehem field in Rapak block and Gendalo field in Ganal block in East Kalimantan to Chevron Indonesia Company (CICo), the operator of the block, for a revision.
SKK Migas? Deputy Chairman Zikrullah said to Petromindo.com that the PoD was sent back to Chevron since the tax incentive requested by the company was considered excessive.
Upstream Director at Ministry of Energy and Mineral Resources Djoko Siswanto said earlier that Chevron has asked for a 270 percent investment credit for the IDD project. According to Djoko, the investment credit should not be more than 100 percent, although the IDD is a deep-sea project that has a greater risk.
PoD for the IDD project was first approved by SKK Migas in 2008. However, after a phase of Front-End Engineering Design (FEED) in 2013, the costs required for this project increased almost two-fold, from about $7 billion to $12 billion.
After nearly two years of delaying the project, Chevron resubmitted the PoD for Gehem and Gendalo fields to SKK Migas at the end of 2015. However, SKK Migas rejected the proposal as the content was deemed incomplete, requesting CICo to revise the PoD.
The IDD project comprises of four gas blocks including Ganal, Rapak, Makassar Strait, and Muara Bakau, covering five fields including Bangka, Gehem, Gendalo, Maha, and Gandang. Ganal, Rapak, and Makassar Strait are operated by CICo, while Muara Bakau by Eni Spa. According to one estimate, the IDD project is able to produce 1,270 mmscfd of gas at peak production.
Editing by Johannes Simbolon