Page 23 - Oil&Gas-AustralAsia-2015-Issue-1
P. 23
I INDONESIA
Major projects face delays from
outdated oil and gas laws
By Marie RYAN
Indonesian gas projects are facing de- sar PSC expires in 2020, Rapak in 2027 long enough to make a return on their
lays due to uncertainty around the ex- and Ganal in 2028. investment. INPEX holds a 65 per cent
tension of production sharing contracts Platts reported Chevron had sought operating interest in Masela, with Shell
(PSCs), it is feared the delays will halt an extension of the PSCs to allow the holding the remaining 35%.
billions of dollars of investment in the project to be economically viable. SKK Migas’ planning deputy chief
oil and gas sector which is experiencing “The government has yet to give ap- Aussie Gautama said the administrators
a declining production output. proval for the extension. The Bangka had asked the government to grant a
Laws around PSC extensions are field, which is the first phase of the IDD three-year approval before or in 2015,
governed by the country’s Oil and Gas project, is to come on stream in 2016, as the approval process for a longer PSC
Law 2001, which is still awaiting key producing 120,000 Mcf/d of gas and extension would create more problems
amendments since the disbanding of 2,880 b/d of condensate,” Pradnyana and could take a longer. “We will do our
former upstream regulator BPMigas by said. best to make sure that contract exten-
the constitutional court in late 2012. The Gendalo hub comprising of the sion can be made in 2015,” Gautama
The constitutional court dissolved Gendalo, Maha and Gandang fields had said.
BPMigas for abuse of power and set up been expected to start production at the The Indonesian government in 2010
a temporary upstream taskforce SKK end of 2016, and Gehem in mid-2017, approved the development plan for the
Migas to carry out the regulator’s role and to be fully on stream by 2018 with block’s Abadi field, which includes a 2.5
during its absence. a combined output of 1.12 Bcf/d of gas million mt/year floating LNG plant. The
The constitutional court of Indonesia and 55,000 b/d of condensate. Masela block contains potential gas re-
has asked the government to amend oil Chevron’s senior management said at its serves of 14Tcf and significant conden-
and gas laws since BPMigas’s departure security analyst meeting in March that sate resources, according to Indonesian
but the process has taken several years. the company has completed drilling for government estimates.
The secretary of upstream regulatory Bangka, which is on track to see first Reports of delays come on the back of
body SKKMigas, Gde Pradnyana said gas next year. comments from the Energy and Mines
US major Chevron’s IDD project in the “The focus of the second phase of Ministry spokesman Saleh Abdurrah-
Makassar Strait and INPEX’s Masela development at Gendalo-Gehem is now man stating the government is targeting
project both face delays. on optimizing project design, working to complete a revision of the law this
The projects are mainly delayed due to with the government to extend the year as it has already been delayed for a
uncertainty on the extension of PSCs - production sharing contract and to long time.
that are linked to the projects’ economic secure long term buyers for the LNG. A “The government will discuss with the
viability,” Pradnyana said. start-up date is yet to be determined,” parliament soon and we have prepared
Chevron’s IDD project was originally the company said. some proposal regarding the revision,”
scheduled to come on stream in 2018, Some of the gas from the IDD project he said.
but will likely be delayed to 2020, Prad- is to be processed at the Bontang LNG An official with the Indonesian Petro-
nyana said. plant. leum Association said the uncertainty
The IDD project includes three PSC Japan’s INPEX is seeking a 20-year on the status of the PSC post-expiry
blocks , the Ganal, Rapak and Makassar, extension to the Masela PSC, disputing can cause, indirectly, losses to the state
covering the Bangka, Gehem, Gendalo, the current contract, which expires in in the form of reduced production and
Maha and Gandang fields. The Makas- 2028 and does not give the partners under-investment in assets. “A prompt
decision will help the industries and
create certainty, he said. §
A Awww.oilandgasaustralasia.com MARCH/APRIL 2015 OIL & GAS ustral SIA 21
Major projects face delays from
outdated oil and gas laws
By Marie RYAN
Indonesian gas projects are facing de- sar PSC expires in 2020, Rapak in 2027 long enough to make a return on their
lays due to uncertainty around the ex- and Ganal in 2028. investment. INPEX holds a 65 per cent
tension of production sharing contracts Platts reported Chevron had sought operating interest in Masela, with Shell
(PSCs), it is feared the delays will halt an extension of the PSCs to allow the holding the remaining 35%.
billions of dollars of investment in the project to be economically viable. SKK Migas’ planning deputy chief
oil and gas sector which is experiencing “The government has yet to give ap- Aussie Gautama said the administrators
a declining production output. proval for the extension. The Bangka had asked the government to grant a
Laws around PSC extensions are field, which is the first phase of the IDD three-year approval before or in 2015,
governed by the country’s Oil and Gas project, is to come on stream in 2016, as the approval process for a longer PSC
Law 2001, which is still awaiting key producing 120,000 Mcf/d of gas and extension would create more problems
amendments since the disbanding of 2,880 b/d of condensate,” Pradnyana and could take a longer. “We will do our
former upstream regulator BPMigas by said. best to make sure that contract exten-
the constitutional court in late 2012. The Gendalo hub comprising of the sion can be made in 2015,” Gautama
The constitutional court dissolved Gendalo, Maha and Gandang fields had said.
BPMigas for abuse of power and set up been expected to start production at the The Indonesian government in 2010
a temporary upstream taskforce SKK end of 2016, and Gehem in mid-2017, approved the development plan for the
Migas to carry out the regulator’s role and to be fully on stream by 2018 with block’s Abadi field, which includes a 2.5
during its absence. a combined output of 1.12 Bcf/d of gas million mt/year floating LNG plant. The
The constitutional court of Indonesia and 55,000 b/d of condensate. Masela block contains potential gas re-
has asked the government to amend oil Chevron’s senior management said at its serves of 14Tcf and significant conden-
and gas laws since BPMigas’s departure security analyst meeting in March that sate resources, according to Indonesian
but the process has taken several years. the company has completed drilling for government estimates.
The secretary of upstream regulatory Bangka, which is on track to see first Reports of delays come on the back of
body SKKMigas, Gde Pradnyana said gas next year. comments from the Energy and Mines
US major Chevron’s IDD project in the “The focus of the second phase of Ministry spokesman Saleh Abdurrah-
Makassar Strait and INPEX’s Masela development at Gendalo-Gehem is now man stating the government is targeting
project both face delays. on optimizing project design, working to complete a revision of the law this
The projects are mainly delayed due to with the government to extend the year as it has already been delayed for a
uncertainty on the extension of PSCs - production sharing contract and to long time.
that are linked to the projects’ economic secure long term buyers for the LNG. A “The government will discuss with the
viability,” Pradnyana said. start-up date is yet to be determined,” parliament soon and we have prepared
Chevron’s IDD project was originally the company said. some proposal regarding the revision,”
scheduled to come on stream in 2018, Some of the gas from the IDD project he said.
but will likely be delayed to 2020, Prad- is to be processed at the Bontang LNG An official with the Indonesian Petro-
nyana said. plant. leum Association said the uncertainty
The IDD project includes three PSC Japan’s INPEX is seeking a 20-year on the status of the PSC post-expiry
blocks , the Ganal, Rapak and Makassar, extension to the Masela PSC, disputing can cause, indirectly, losses to the state
covering the Bangka, Gehem, Gendalo, the current contract, which expires in in the form of reduced production and
Maha and Gandang fields. The Makas- 2028 and does not give the partners under-investment in assets. “A prompt
decision will help the industries and
create certainty, he said. §
A Awww.oilandgasaustralasia.com MARCH/APRIL 2015 OIL & GAS ustral SIA 21
