The Jakarta Post
Another round of hilarious brawling between two ministers has played out, with Coordinating Maritime Affairs Minister Rizal Ramli poking fun at Energy and Natural Resources Minister Sudirman Said via his Twitter account.
After openly criticizing Said’s indecision on Freeport’s operating permit last year, and his granting of an export permit extension despite Freeport’s failure to meet government requirements, Rizal launched a new satire attack against Sudirman over the Masela block development plan.
The outspoken Rizal made his move on Feb. 23 by announcing that the government had decided to go with the onshore scheme for the block. The claim was then refuted by President Joko “Jokowi” Widodo’s spokesperson Johan Budi a day later.
"Do not start polemics. You, who pretend to strive for the people, who deceive, who claim to know best, who want to change the minds of Masela's investors, stop fooling the public because one day your filthy intentions will be uncovered," Sudirman told journalists on Feb. 27.
Sudirman did not explicitly mention the person he was attacking. However, the news came to Rizal when his Tweeter account was mentioned in his follower's tweet which linked to a news reporting Sudirman's statement. Rizal then posted a meme depicting Sudirman's face along with his "Do not start polemics..." statement.
The caption read: "My… Oh my... Busy analyzing your own behavior? Very funny."
The clash over the development plan happened while Jokowi’s administration cautiously mulled its decision on the block. Rizal’s team believed that the nation’s biggest deep-water gas block should be developed via an onshore scheme, as it would provide a greater multiplier effect for local communities.
Sudirman, in contrast, tended to agree with the block developer — a cooperation between Japan’s Inpex and the Netherlands' Shell — that proposed an offshore development. Inpex currently holds a 65 percent share in Masela and Shell a 35 percent share.
While Jokowi’s administration was split on the issue, public opinion, though divided, tends to agree that both schemes are feasible. The issue now focuses on the politicians' decision regarding the block development, a decision in which some wealthy politicians may have vested interests.
There have been a lot of feasibility studies conducted on the block development by various institutions. Shell, for instance, ran a study two years ago. Consulting firm Poten and Partners, appointed by the upstream oil and gas regulatory special task force (SKK Migas), disclosed the results of another study in December 2015.
Both studies showed that the offshore scheme was a cheaper one, but both were refuted by Rizal who said that Shell had understated the costs involved.
The government then appointed Economic and Social Research from the University of Indonesia (LPEM-UI) to do a review. The result showed that the offshore scheme would lead to higher GDP growth, but the onshore would likely make a greater contribution to household income and employment.
The Institute for the Development of Economics and Finance (INDEF) urged the government to speed up decision making on the block as industries needed more gas supply, while the developers have waited for the government's decision for decades.
"They already spent a lot of money to explore and study. The results of the studies are quite similar. If additional technical research is conducted, I believe it will not lead to different results," INDEF economist Berly Martawardaya said.
Assuming the Masela block development is agreed on in 2016, SKK Migas predicts the production phase of Masela will start in 2018 at the earliest, since preparations would need at least two years.
"It will take two years. One-and-a-half years for detail engineering and the tender process will take up to 6 months," SKKMigas spokesperson Ketut Budiarta said.
A member of the House of Representatives Commission VII overseeing energy, Satya Yudha, argued that the option eventually chosen for the development was not really an issue, as long as it maintained a commitment to support local industries.
He pointed out the failure of onshore Tangguh LNG facilities to provide maximum benefits to local industries such as electricity, fertilizer industries, petrochemical manufacturing, etc.
"The block should support the local industries. It doesn’t really matter whether it's offshore or onshore. Look at Tangguh LNG, built during Suharto's era. It's an onshore [project], but they dedicate most of the product to export. The local industries don't enjoy the benefits much," he said.
Though the ministers have clashed publicly, the decision is not in their hands. It is the President who has the ultimate authority to decide on Masela block. However, he should be aware that the longer the delay the more opportunity to utilize the block in the near future is lost, and the country needs more energy.
Time, indeed, is money. And it’s ticking, Pak Jokowi... (ags)