Royal Dutch Shell mulls return to Indonesia

Royal Dutch Shell PLC is considering upstream and downstream investments in Indonesia, from which it has been absent for many years, according to Chief Executive Officer Peter Voser.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Mar. 19 -- Royal Dutch Shell PLC is considering upstream and downstream investments in Indonesia, from which it has been absent for many years, according to Chief Executive Officer Peter Voser.

“We have been in talks with state oil company Pertamina and the government, offering them our technology and experiences to develop energy projects such as a floating LNG plant,” Voser told The Jakarta Post.

Voser’s remark reiterated reports in January 2009 that Royal Dutch Shell is considering taking part in a project of Inpex Corp. to construct a floating LNG plant in Indonesia.

Inpex, operator of Abadi gas field on the Masela block in eastern Indonesia, plans to build an LNG train with capacity of 4.5 million tonnes/year to start in 2016.

Voser acknowledged Shell has long been absent from Indonesia but insisted “we have come back, and we are the first oil major to enter the downstream market with our strong retail brand.”

Although Shell plans to sell up to 9,000 gasoline stations in mature markets as part of a continued cost-cutting program, the firm will further expand its retail network in Indonesia (OGJ Online, Mar. 16, 2009).

Voser did not detail Shell’s upstream interests in Indonesia, but another company official last year said the firm is aiming at a 30-60% stake in the Natuna D Alpha block.

Shell is among eight candidates shortlisted by Pertamina to develop the Natuna D-Alpha block, which holds an estimated 46 tcf of gas (OGJ, May 4, 2009, Newsletter).

Documents agreement
Last April, the Indonesian government said Shell had signed a memorandum of understanding under which the company would return historical exploration documents to the country.

Evita H. Legowo, director general for oil and gas at the Energy and Mineral Resources Ministry, said she had signed the document in The Hague on Apr. 22, 2009.

"Under the MOU, Shell agreed to return all its exploration documents before 1965," Evita said. She added Shell committed to provide around $500,000 to cover the scanning, processing, and delivery of the documents.

"We expect the data transfer will be completed in no more than 1.5 years," she said.

Asked whether Shell expected any trade-off from its return of the data, Evita said so far the agreement did not specify anything.

Royal Dutch Shell began working in Indonesia more than 100 years ago, but sold its Indonesian assets to Pertamina in 1965 after natinoalization.

Contact Eric Watkins at hippalus@yahoo.com.

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