Energy and Mineral Resources Minister Ignasius Jonan meets Inpex chief executive Takayuki Ueda in Tokyo on Monday. (Photo courtesy of the Energy and Mineral Resources Ministry)

Indonesia, Inpex Complete Masela Block Deal After Nearly Two Decades of Talk

MAY 28, 2019

Jakarta. SKK Migas and Japanese energy company Inpex agreed on several important points in the development of the Masela gas block during a meeting in Tokyo on Monday, suggesting that production in the giant Arafuru Sea gas field may start soon, a press release from the Energy and Mineral Resources Ministry has said.

"The investment value [in the project] is between $18-20 billion, shared equally between the Republic of Indonesia and the contractor," said Energy and Mineral Resources Minister Ignasius Jonan in the statement.

"The negotiation has been going on for 18 years. I was touched," he said.

In Tokyo, Jonan met Inpex chief executive Takayuki Ueda. Jonan had earlier met Ueda on May 16, also in Tokyo, when both parties discussed the Masela block's Final Plan of Development framework.

Monday's meeting finalized details of the framework, which will allow an agreement between the Indonesian government and Inpex to be signed soon. 

Indonesia and Inpex agreed on a profit-sharing scheme in which the government will receive at least 50 percent. 

Jonan said the government and Inpex are scheduled to sign the agreement during a ceremony on the sidelines of the G20 Summit in Osaka on June 28-29. 

During Monday's meeting, Jonan was accompanied by the Indonesian Ambassador to Japan Arifin Tasrif, head of SKK Migas Dwi Soetjipto, deputy head of SKK Migas Sukandar and SKK Migas' deputy of planning Jafee Suardin.

It is estimated that the Masela block contains 18.47 trillion cubic feet of proved and probable gas reserves or 3.2 trillion barrels of oil equivalent. Indonesia's current gas production amounts to around 1.2 million barrels of oil equivalent per day.