OIL AND GAS - JAKARTA. Indonesia has renewed its threat to take back Shell's stake in the gas-rich Masela block if it fails to sell it by next year, according to a senior government official, who confirmed Malaysia's state-run Petronas was a potential buyer.
Shell has been looking to sell its 35% participating interest in the Masela project since 2019. Japanese energy company Inpex Corp holds a 65% controlling stake in the venture, also known as the Abadi LNG project.
Djoko Siswanto, secretary general of the National Energy Council, which formulates policies with the energy ministry and upstream regulator SKK Migas, said the government had given Shell enough time to sell its stake but the company has been too slow to decide.
"We could terminate (the stake) and Shell won't get anything. So they must be quick to make a decision," he told CNBC Indonesia TV, adding that Petronas has expressed interest in buying the stake.
Indonesia's energy minister Arifin Tasrif last week called Shell "irresponsible" for dragging it out, according to media reports.
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Shell declined to comment and Petronas did not immediately respond to a request for comment.
Indonesia is keen to move the project forward to boost its natural gas output.
The project's annual LNG production volume is expected to reach 9.5 million tonnes at its peak, according to Inpex. Masela block has one of the biggest gas reserves in Indonesia.
Last year, SKK Migas said the project's onstreaming may be delayed for two years from an earlier projection of 2027.
Government officials have repeatedly urged Shell to deliver on the sale and have previously said a consortium consisting of state-owned energy firm Pertamina, the Indonesia Investment Authority soverign wealth fund, and other companies, may purchase the stake.
Inpex submitted a revised development plan for the project to include carbon capture and storage component earlier this year.
