ESDM Seeks Replacement for Departing Investors in Major Oil and Gas Projects

Oil and Gas Source

The Indonesian Ministry of Energy and Mineral Resources (ESDM) is currently in search of replacements for several investors who have withdrawn from various oil and gas projects in the country. Projects such as the Indonesia Deepwater Development (IDD) and the Masela Block are being offered by the ESDM to potential investors.

ESDM Minister Arifin Tasrif has stated that the continuation of these two projects, which have been stalled for some time, will soon be announced. This comes after Chevron’s decision to withdraw from the IDD project, and Shell’s desire to sell its 35% participation rights in the Masela Block.

“In early June (the decision for the Masela Block) and another project, IDD, the decision will be made by the end of May, so hopefully it will be good news in early June,” said Arifin, during an interview in his office on Friday (5/5/2023).

Therefore, Arifin hopes that with the arrival of new operators to replace Chevron in the IDD project, and new consortium members to replace Shell in the Masela Block, both of these major projects, which are sources of pride for President Joko Widodo, will run smoothly.

As we know, the Masela Block was originally planned to start operations in 2027, but is now estimated to be delayed until 2029. In addition to waiting for the divestment of Shell’s 35% stake in the Masela Block, the Covid-19 pandemic is said to have also caused delays in the project.

Meanwhile, the IDD project, which was originally targeted to start production in 2025, is now estimated to be delayed until 2028. The delay in the project’s operation schedule is attributed to Chevron, the American operator of the deep-sea gas project, deciding to withdraw from the project.

Despite this setback, the search for a replacement operator for Chevron is making progress. Therefore, the submission of a revised plan for the POD (Plan of Development) for this project is expected to be completed in the third quarter of this year.

The Ministry of Energy and Mineral Resources is committed to maintaining the continuity of these two large-scale oil and gas projects in Indonesia, which have the potential to greatly benefit the country’s economy. The search for new investors is expected to continue, as the ESDM seeks to ensure the success of these projects.