Pertamina and Petronas to Takeover Shell's Masela Gas Project

The Indonesian energy minister announced on Monday that state energy corporations Pertamina and Petronas intend to take over Shell's participation interest in Indonesia's Masela gas project.

Shell has been attempting to sell its 35% stake in Masela, and Indonesian authorities are eager for the firms to conclude the transaction in order to move the project forward after years of delay.

"They are both doing the negotiation," Energy Minister Arifin Tasrif said, referring to Pertamina in Indonesia and Petronas in Malaysia.

"They have to finalise what kind of joint scheme they are preparing," he said on the sidelines of the Energy Asia conference, which Petronas is hosting in Kuala Lumpur.

A Shell spokesperson said the company could not comment on ongoing portfolio activity, while Petronas did not immediately respond to a request for comment.

Due to diminishing blocks, Indonesia has seen sluggish oil and gas production in recent years, while several significant new projects, such as Masela and Indonesia Deepwater Development (IDD), have been delayed as majors such as Shell and Chevron Corp depart projects as part of their worldwide strategy.

The clock is ticking for Indonesia to utilise its vast hydrocarbon reserves, even as countries around the world shift to non-fossil fuels to curb emissions.

At the occasion, Malaysian Prime Minister Anwar Ibrahim stated that hydrocarbons will be an important element of Southeast Asia's energy mix, and that achieving net-zero emissions targets should not come at the expense of economic growth or vice versa.

Pertamina and Petronas are preparing for a sales agreement with Shell, Arifin said, adding that he hoped a deal would be settled within a month.

Earlier this month, Pertamina's CEO said it was finalising a Masela project deal.