Jakarta — Indonesia’s oil and gas regulator SKK Migas has agreed with Japanese energy explorer Inpex Corp on a framework for a revised $20 billion development plan for the Masela gas block, the energy ministry said on Monday.
The government expects to have at least a 50% share in production from the block, the ministry said in a statement.
The Masela project has faced a prolonged delay since the Indonesian government ordered Inpex in 2016 to change the liquefied natural gas plant development scheme from offshore to inland in order to better benefit the local economy.
The agreement was reached during a visit by Indonesian officials to Tokyo, the ministry said.
The government aims to sign the final deal with Inpex during G20 meetings in Japan in late June.
“This negotiation has been going on for 18 years. The investment value is between $18 billion to $20 billion, with fair split for the Republic of Indonesia and the contractors,” energy minister Ignasius Jonan said separately on his Instagram account on Monday.
The change of development plan from offshore to inland has pushed the estimated start of production to the late 2020s.
Located in eastern Indonesia, the block is currently 65 percent controlled by Inpex and 35 percent by Royal Dutch Shell.
Shell is looking for buyers for its stake in the project, which could raise around $1 billion, sources said this month.