The Maluku provincial administration will get a 10 percent participating interest in the gas-rich Masela block, located in the Arafura Sea, pending the inauguration of a new governor, a top official says.
Deputy Energy and Mineral Resources Minister Susilo Siswoutomo said on Monday the central government was waiting for a new 'de facto' provincial leader to take office in order to discuss the share in the block.
'Of course, eventually, our move will be to give the 10 percent participating interest in the deep-sea project to the local administration,' Susilo said in a text message.
'We hope that after a new governor is elected then talks on the acquisition can be finalized between the related parties and thus the decision can be taken,' said Susilo, formerly an adviser to the now-defunct upstream oil and gas regulator BPMigas and in 2006 a monitor of Japan's INPEX-operated Masela project.
He was referring to the current Maluku gubernatorial election.
The poll will go to a second round after none of the five pairs of candidate gained the minimum 30 percent-plus-one of the vote last week.
The candidates include Central Maluku Regent Abdullah Tuasikal and his running mate Hendrik Leweriss as well as Maluku Deputy Governor Said Assegaf and his mate Zeth Sahuburua.
The Maluku administration has made strenuous efforts to get a participating interest in the Masela block since 2010.
The government issued the production-sharing contract ( PSC ) for the Masela block in November 1998. The gas-rich block is expected to produce 2.5 million tons of natural gas per year and 8,400 barrels of condensate per day during the initial phase of production in 2018.
Currently, INPEX, an affiliate of Japan's Inpex Corporation, holds a 65 percent participating interest in the block while Shell Upstream Overseas Services, a subsidiary of Royal Dutch Shell Plc, holds the remaining 35 percent.
The two foreign oil and gas contractors each bought a 5 percent stake from the publicly listed oil and gas firm PT Energi Mega Persada, part of the Bakrie Group, in a deal worth at least US$300 million in May.
Contacted separately, INPEX's spokesman Alfred Menayang said the contractor was currently waiting for the government to decide on the 10 percent participating interest it would give to the Maluku administration.
'In this case, INPEX does not have any authority to decide anything. We will wait,' he said.
' JP/Amahl S. Azwar