Jakarta – PT Pertamina (Persero) through its upstream sub-holding PT Pertamina Hulu Energi (PHE) has officially taken over Shell’s management rights in the Masela Block. The signing of the sale and purchase agreement for the acquisition of Shell’s 35% stake in the block located in the Arafura Sea, Maluku, was carried out at the opening ceremony of the Indonesia Petroleum Association (IPA) Convention, Tuesday, 25 July.
PHE will manage 20 per cent of Masela’s working interest, and Petronas will manage 15 per cent. Meanwhile, 65 per cent is still controlled by PT Inpex Masela Limited. The signing of the Masela Block ownership sale and purchase agreement was carried out directly by PHE President Director Wiko Migantoro, Naib President Executive and Chief Executive Officer of Huluan Petronas, Datuk Adif Zulkifli, and Director Finance for Acquisition Divestment and NBD Asia Pacific Shell Kuo Tong Soo. Also witnessing the signing were Minister of Energy and Mineral Resources (EMR) Arifin Tasrif, Director General of Oil and Gas Tutuka Ariadji, Head of SKK Migas Dwi Soetjipto, and President and Chief Executive Officer of Kumpulan Petronas Tan Sri Tengku Muhammad Taufik.
Pertamina CEO Nicke Widyawati said that in the future, the Masela Block Abadi Field has the potential to absorb up to 10,000 workers. The development of Masela Block is expected to help accelerate the development of the local area to create new jobs and absorb local labour. This will certainly have a direct impact on economic development in Eastern Indonesia.
“To fulfil national energy needs, a commitment is needed to maintain oil and gas supply upstream. In addition to managing existing fields, a strategy is needed to develop new fields, one of which is the Abadi Field in the Masela Block,” Widyawati said in a written statement.
Meanwhile, according to information from the Ministry of Energy and Mineral Resources, the Masela Block has an area of approximately 4,291.35 square km and borders neighbouring Australia. Initially, the reserves of Masela Block were only 6.97 TCF. However, in 2013 new reserves were discovered and increased to 10.73 TCF.
Pertamina’s journey to gain control of this enduring oil and gas refinery has been a long one. Inpex first obtained the right to manage and explore the Masela Block in 1998. After a long time, gas reserves in the Masela Block were finally discovered in 2000.
From 2000 to 2010, Inpex explored the perennial block with a 100 per cent stake. However, in 2011 Shell entered as a partner with a 35 per cent stake, and Inpex became 65 per cent. Over time, the gas-rich project has been slow and conflict-ridden. In 2015, the location of the refinery for the Masela Block development was debated.
Initially, the refinery’s location was decided to be on the high seas or offshore. However, some say that it is more efficient to do it onshore. The debate between onshore and offshore was quite long. In 2016, President Joko Widodo finally decided to do it onshore until today.
In 2020, Shell resigned as Inpex’s partner in managing the Masela Block. Since then, the government has been looking for a replacement for Shell to become Inpex’s newest partner. (Hartatik)