Jakarta, CNBC Indonesia – The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) explained in detail about a number of large foreign oil and gas companies leaving the country one by one.
Several names of foreign oil and gas ‘giants’ who have stated that they will withdraw from oil and gas projects in Indonesia include Shell, Chevron, and most recently ConocoPhillips.
Head of SKK Migas Dwi Soetjipto revealed that on December 9, 2021, ConocoPhillips had sent a letter to SKK Migas and conveyed that the approval had been signed to release all of its shares to PT Medco Energi Indonesia Tbk (MEDC).
It is known that ConocoPhillips Indonesia Holding Ltd (CIHL) is the holder of 100% shares in Conocophillips Grissik Ltd (CPGL) and 35% shares in Transasia Pipeline Company Pvt. Ltd. (Transasia). In which, CPGL is the operator of the Corridor PSC with a 54% working interest (participating rights).
“And what happened was an agreement to release ownership of CIHL from ConocoPhillips International Investment to Medco Energi. That’s the information,” explained Dwi in CNBC Indonesia’s Energy Corner, Wednesday (12/22/2021).
ConocoPhillips through its official statement stated that the sale of 100% of ConocoPhillips’ assets through ConocoPhillips Indonesia Holding Ltd to PT Medco Energi International Tbk (MEDC) to increase shares in Australian oil and gas companies.
ConocoPhillips will use the proceeds from the sale of assets in Indonesia for the benefit of an additional stake in Australia Pacific LNG (APLNG) of 10% of Origin Energy.
With the release of all shares in the Corridor Block, it means that ConocoPhillips is no longer the operator or managing oil and gas blocks in Indonesia, both production and exploration blocks.
Currently, said Dwi, the process is still ongoing, including the attitudes of all the consortiums involved, including ConocoPhillips, Talisman, and PT Pertamina. The government has actually also extended the ConocoPhillips Corridor Block contract which will expire in December 2023.
“While later in the extension in 2023, […] It was also agreed that after three years of extension, Pertamina could become a replacement operator,” Dwi continued.
Dwi also explained that several oil and gas ‘giants’ are planning to leave Indonesia, such as Shell and Chevron.
As is known, Shell plans to release 35% of its participating interest in the Abadi Field, Masela Block, Maluku. In fact, the gas project in the Masela Block is one of the “giant” gas projects that is also included in President Joko Widodo’s National Strategic Project (PSN).
The project, led by a Japanese company, Inpex Masela Ltd, is estimated to cost up to US$ 20 billion and is targeted to be operational in 2027.
Dwi explained that divestment from oil and gas players is a common thing in the drilling world. Divestment, said Dwi, is usually done when the calculation is profitable for the company.
So far, according to him, Shell’s plan has not been realized because there is no agreement. Thus, Abadi Field, Masela Block are still led by Inpex Masela and Shell also still has participating rights in this gas block.
“Shell has also stated, if not dealYes, Shell is still the shareholder of Masela,” explained Dwi.
According to Dwi, each corporation has its own reasons and that’s fine.
“As we all know, Shell itself is very serious in new and renewable energy and it is also serious in downstream. That is in the interests of each,” he said.
Meanwhile, regarding Chevron, through its business unit, Chevron Indonesia Company (CICO) also stated that it would withdraw from the Indonesia Deepwater Development (IDD) deep sea gas project in East Kalimantan.
Chevron said that the Phase 2 IDD project with an investment value of over US$ 5 billion could not compete for capital in Chevron’s global portfolio.
Responding to Chevron’s plan to leave the country, he said that Chevron is also currently looking for a potential replacement partner. If there is no agreement with a potential replacement partner, according to him, Chevron will continue this project.
“So now we are looking for a replacement partner, but as long as there is a deal. If not, then we will carry out according to the provisions and Chevron must follow up on the first stage which is currently in the process of carrying out the preparation of the project,” explained Dwi.
Likewise with the management of the Rokan Block which is no longer managed by Chevron, but has shifted to PT Pertamina Hulu Rokan (PHR) since August 9, 2021, Dwi claims that Chevron did not resign, but lost the tender in the Rokan Block.
“Chevron I need clarification in the public, in Rokan not Chevron resigned, but Chevron lost the tender in Rokan,” he concluded.
(wia)
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