KONTAN.CO.ID - JAKARTA. Upstream Oil and Gas Regulatory Agency (SKKMigas) chairman Dwi Soetjipto says that Royal Dutch Shell is denying speculative reports that claim the company is about to sell its stake in the Abadi liquefied natural gas (LNG) project from gas rich Masela Block.
“Informally, Shell has told us that there’s no plan to sell their stake and if I am not mistaken, the company promised to issue an official statement about it today,” Dwi told the press that Monday.
Meanwhile, Shell Indonesia spokeswoman Rhea Sianipar did not confirm nor deny the report, saying that the company “would not comment on any rumor or market speculation”.
“Currently, we only focus and keep working together with Inpex as the lead operator, in the process to complete the project’s plan of development [PoD],” she told The Jakarta Post on Monday.
On Friday, Reuters published an article quoting industry and banking sources saying that Shell would sell its 35 percent stake in the US$15 billion Abadi LNG project in Masela Block.
Furthermore, the report said that Shell wanted to sell its stake to raise about $1 billion to help finance its $54 billion purchase of a British energy firm, the BG Group, in 2015.
A series of policy changes, such as switching emphasis from off-shore to on-shore facilities, in recent years had affected the project. The onstream date was initially to be 2018, but it was delayed to 2027, one year before the Masela Block’s contract was to end.
Based on recent data from SKKMigas, the Abadi field LNG project is to go onstream in the second quarter of 2027 with an estimated LNG annual output of 9.5 million tons and 150 million standard cubic feet per day (mmscfd).
Dwi said if Shell really wanted to exit from the project, there would be no significant affect to it because the lead party was Japan’s Inpex corp, the official added.