BEHIND THE DEADLOCK IN MASELA NEGOTIATIONS
After seven months of controversy accompanied by a clash in the cabinet, President Joko Widodo finally decided to choose an onshore scheme (onshore LNG) to develop the Abadi Gas Field in the Masela Block in the Arufuru Sea, Maluku. Meanwhile, Inpex and Shell, as the operators of one of the largest natural gas fields in Indonesia, actually prefer to use an offshore scheme (floating LNG). This decision has prolonged Inpex’s wait for developing the block which has cost the company US$ 1.2 billion in 16 years. The government ordered Inpex to revise its plan of development on the Masela Block.
This special report will discuss various aspects concerning the Masela Block, including the story behind the stiff negotiations over the block. This report was prepared based on studies on the Masela block as well as various inside information compiled by the Katadata team. Other oil and gas contractors are expected to learn a lesson from this case study. The contents of this special report are as follows:
- The natural gas era and the end of oil’s heyday in Indonesia
- Various challenges and long controversy over the Masela Block (2000-2016)
- Political map and interests behind the controversy surrounding the Masela Block under Widodo
- The economic assessment of onshore and offshore schemes in the eyes of the contractors, the central government and local governments.
- The risks and the social and technological impacts, the two important aspects in the selection of onshore-offshore options.
- The fate of the Masela Block’s plan of development following the president’s decision.
1 June 2016
- This report includes 1 pdf file.
- 77 pages.
Behind the Deadlock in Masela Negotiations
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