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Jakarta Post

Ministers no show for face-off, yet feud flickers on

  • Fedina S. Sundaryani and Tama Salim

    The Jakarta Post

Jakarta   /   Thu, March 3, 2016   /  08:48 am

The rift between Energy and Mineral Resources Minister Sudirman Said and his supervisor Coordinating Maritime Affairs Minister Rizal Ramli over the development of the Japan-led Masela block has continued despite President Joko '€œJokowi'€ Widodo'€™s instructions not to discuss the issue publicly.

Feuding ministers Sudirman and Rizal were both slated to make a long-awaited public appearance together to discuss the controversial issue but excused themselves at the last minute, instead sending their representatives to go head to head with their initial campaigns.

Said sent Upstream Oil and Regulatory Special Task Force (SKKMigas) head Amien Sunaryadi, who stood firm in supporting the development of a floating liquified natural gas (LNG) plant on the gas block located in the Arafura Sea as sudden changes would push back further the already uncertain timeline.

The Masela plan of development under an offshore scheme was approved by the previous Yudhoyono administration in 2010 but was revised again last year after Japan'€™s Inpex and the Anglo-Dutch Shell discovered that there were larger reserves, which brought the LNG production capacity from 2.5 million tons per year to 7.5 million tons.

The block is estimated to be able to produce 1,200 million standard cubic feet per day (MMSCFD) of gas and 24,000 barrels per day of condensate for 24 years, according to figures from the Energy and Mineral Resources Ministry.

'€œSKKMigas had targeted for [the plan of development approval] to be finalized last year. I hope that it can be approved next week, but obviously those are my wishes as the SKKMigas head,'€ Amien said.

Approval was set for last year so that contractors could meet the scheduled final investment decision in 2018 and complete development by 2024. However, the plan of development approval under an onshore scheme, as proposed by Rizal, could postpone the decision by another three years.

Meanwhile, Rizal'€™s representative, Office of Coordinating Maritime Affairs Minister expert staff Ronnie Rusli, said that building a floating LNG was risky as there were currently no other plants of its kind in the world, save for the Prelude floating LNG in Australia, which is under construction. Furthermore, an onshore scheme was thought to be more beneficial for local
development.

The feud between the two parties started as soon as Rizal was appointed a minister in last year'€™s Cabinet reshuffle, starting with his criticisms of the government'€™s plan to develop 35,000 megawatts of power in five years.

Neither minister seems to be backing down as they have gone online to express their disdain for one another.

House of Representatives Deputy Speaker Fadli Zon said that prospective investors may be unsure whether to invest in the country due to the constant disagreements between the two institutions and said the government should have a united front.

'€œThis is just a simple leadership problem. If we don'€™t resolve this, it will inflict even more ambiguity for both the public and for those who want to invest in Indonesia. This does not bode well for the investment climate,'€ he said.

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