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ontinuous political infighting between a senior Cabinet minister and the energy minister has left the future of Japan-led Masela gas block in limbo as its financiers decided to delay their investment until the end of 2020 and downsize personnel in their Indonesian units.

Japanese oil and gas company Inpex, the operator of the project, had submitted a revision of the block'€™s plan of development (POD) in September last year.

Along with its partner Anglo-Dutch firm Shell, Inpex initially expected to realize their investment by the end of 2018 contingent upon the revision'€™s approval.

But Coordinating Maritime Affairs Minister Rizal Ramli and Energy and Mineral Resources Minister Sudirman Said have been in war of words over the Inpex'€™s proposed revision.

While Sudirman is in favor of Inpex'€™s plan to make an offshore platform for Masela'€™s development, Rizal repeatedly says an onshore facility will ensure wider benefits for local people.

The oil and gas regulator said late Wednesday that even if the government ultimately makes a decision on the issue, the investment '€” known as the final investment decision (FID) '€” can only be scheduled for the end of 2020 due to political factors.

'€œWe have to think like the international investors who include country risks in their calculations. [Realizing the investment] at the end of 2018 will still be acceptable. But, in 2019 there will be elections, which is a difficult time to make any large investment decisions,'€ said Amien Sunaryadi, head of the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas).

The delay of the US$14 billion project means that it will not be operational until 2026, just two years before the contract expires.

The Masela block, which is located in the Arafura Sea, is currently operated by Inpex and Shell, where each company holds a 65 percent and 35 percent stake respectively. The Masela'€™s original plan of development was submitted in 2010, but the discovery of larger resources led contractors to revise the plan and adjust the floating LNG plant'€™s capacity to 7.5 million tons per year from 2.5 million tons.

However, the plans were put on hold after Coordinating Maritime Affairs Minister Rizal Ramli claimed that an onshore scheme could save $6 billion and be more beneficial to locals on Aru Island.

The decision on whether to commence with an offshore or onshore scheme now lays in the hands of President Joko '€œJokowi'€ Widodo.

In addition, Amien said Inpex had planned to downsize its personnel of around 400 in Indonesia by 40 percent, while nine Shell engineers attached to the Masela project had been asked to seek other work within the company.

Meanwhile, Inpex reaffirmed its commitment to the project but emphasized that it hoped for a swift decision.

'€œAs soon as a decision is made, we will immediately follow up the project by completing the FEED [front end engineering design], as we had proposed,'€ Usman Slamet, Inpex'€™s senior manager of communication and relations, said in a statement.

He added that Inpex would also accommodate a number of their human resources to work at the company.

Shell'€™s general manager of external relations, Haviez Gautama, also echoed Inpex'€™s commitment and said it would continue '€œworking with Inpex to review re-sourcing requirements pending approval of the revised POD, to ensure that preliminary work on the project continues and we can then move as quickly as possible once the approval is granted.'€

Delays in the approval may hurt Indonesia'€™s oil and gas sector, which has been facing declining production due to lack of new explorations. This may lead to a wider supply and demand gap for natural gas in the country and increase reliance on imports.

Furthermore, Bloomberg has reported that there is also a weak global outlook for gas as the Japanese LNG market is predicted to be oversupplied by 20 percent by 2020.

However, Pri Agung Rakhmanto, an energy expert from the ReforMiner Institute, said investors should understand the political influence over business decisions and include it as a country risk factor for Indonesia.