Pertamina Finalizing Takeover of Shell’s Shares in Masela Gas Project

SEATTLE (Oil Monster): Indonesian state energy firm Pertamina is finalising an acquisition of Shell's (SHEL.L) shares in the country's Masela gas project, its chief executive officer said on Tuesday.

Indonesia's energy minister on Monday said Pertamina was leading a consortium of investors to take over Shell's 35% participating interest in Masela block.

Authorities are keen to develop the project, designed to have annual LNG production volume reaching 9.5 million tonnes at its peak, after years of delays.

"There are high hopes that this giant gas block can be developed soon so the gas asset in Masela can be monetised," CEO Nicke Widyawati told a news conference.

She declined to share further details about the transaction, citing a non-disclosure agreement.

Shell's Indonesian unit had so far declined to comment on the possible deal.

Government officials had repeatedly urged Shell to deliver on the sale and accused it of dragging it out.

Pertamina is also looking to acquire other upstream assets overseas, Nicke said, focusing on assets that are already in production to help feed into its refineries.

The state company currently imports about 35% of its crude needs.

Meanwhile, asked whether Pertamina was still considering importing crude oil from Russia, Nicke said the company is not fixed on one particular source as long as they can get competitive price.

Since the completion of its Balongan refinery last year, Pertamina is now able to process sour crude oil such as Russian Ural crude, and Pertamina had said last year that it was considering a Russian purchase.

"In the past we could only process crude with low sulphur, which is expensive. Now we can buy from anywhere, but we don't need to specify any country," Nicke said.

Meanwhile, the company will also launch its bioethanol product made from sugar molasses.

Courtesy: www.reuters.com