KATADATA - The four oil and gas megaprojects, which are located in Moluccas, Makassar Strait, East Kalimantan, and Papua, are recorded as the highest investment that investors have made in Indonesia, with the total investment that stands at US$ 43 billion. This number exceeds the Foreign Direct Investment (FDI) in 2014 that stood at US$ 28.5 billion, which covers 24 other sectors besides oil and gas.
Besides the high investment value, the four megaprojects are strategically valuable because they will be able to strengthen the national energy security. When they are fully operational in 2025, the projects are predicted to put up 46.3 percent out of the total national gas reserves, or equal to 3.448 million standard cubic feet per day (mmscfd). And so, ever since 2010, the government’s Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) always prioritize these four megaprojects to include them as the main project of the national gas development.
However, the investment process is not easy. Complicated procedures have made the implementation of the megaprojects to be delayed continuously. As the result, the productions are predicted to be delayed from the set target, and that the investment will swell even more. For example, IDD Chevron in Makassar Strait, was initially scheduled to be productive in 2016, but now it is scheduled to fully run in 2020. And this has made the investment for this project to double from US$ 6.9 billion (2008) to become US$ 12 billion (revision in 2014).
The same thing also happened in Masela project in Moluccas. The operational plan has been delayed from 2018 to 2024. Besides the absence of buyers and the slow project approval, Masela’s existence has always been argued by certain sides. The contractor has even postponed the investment plan because the cash outflow is not worth it compared to the results, considering the contract of the block will expire soon.