"We honor the President`s decision and, along with Shell, will continue developing Masela," its spokesman Usman Slamet said.
Jakarta (ANTARA News) - Inpex Masela Ltd, the operator of Masela Block, honors President Joko Widodos decision to develop the gas field in Arafura waters in Maluku using an onshore scheme, its spokesman Usman Slamet said here on Friday.

He said Inpex, with its partner Shell Corporation, would continue to invest to develop the Masela Block.

"We honor the Presidents decision and, along with Shell, will continue developing Masela," he affirmed.

He said on April 1, 2016, he received an official letter from the head of SKK Migas, the upstream gas and oil regulator, Amien Sunaryadi, containing an instruction to change the development scheme for Masela Block from offshore to onshore.

SKK Migas, he stated, has also asked Inpex to submit a plan to develop the Masela Block as per the onshore scheme.

Inpex is currently studying ways to develop the block as per the new scheme, he added.

"It takes time to change the scheme as it will not only affect technology but also the entire concept itself, and therefore, we will conduct a study from the beginning," he explained.

He informed that the change required a review of terms and conditions, including a relook at product sharing, domestic market obligations and tax incentives.

"SKK Migas has also said it would propose new terms and conditions," he said.

In view of that, he expressed his inability to give any deadline for submission of a plan of development but said, "We will try to submit the POD as quickly as possible."

Usman underscored that the company was also not in a position to immediately state what would be the location of the onshore scheme-based liquefied natural gas refinery.

"All options are still being studied. Maluku is an archipelago unlike Kalimantan. The decision about the location must not lead to any conflict," he said.

President Joko Widodo had said on March 23 that he had decided to develop Masela Block as per an onshore scheme, meaning the LNG refinery will be built onshore and not offshore as initially proposed by Inpex-Shell.

The decision was taken after a lot of consideration, especially with regard to regional economic development and human resource development in Maluku.

The President took the decision in view of the huge investment and the impact that the project is likely to have.

As per existing regulations, the energy minister also could have taken this decision on his own.

The Masela Block is being developed by Japanese contractor Inpex Masela Ltd., which will also be the operator of the block with 65 percent participation ownership while Shell Corporation will have the rest of 35 percent.

Masela Block is located in Arafura waters bordering Australia and Timor Leste.(*)

Editor: Heru Purwanto
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