The Indonesian government has approached Italian oil and gas company Eni to take over the national strategic Indonesia Deepwater Development (IDD) project in Kutai Basin along the Makassar Strait from Chevron which reportedly plans to exit from the project amid low commodity prices. Ego Syahrial, an official with the Energy and Mineral Resources Ministry on Wednesday, confirmed the move and said that Chevron’s withdrawal was “one packet” with its impending exit from the Rokan Block in Sumatra.
The IDD project includes the development of the Bangka Field and the Gendalo-Gehem Field in the Kutai Basin. Chevron started production in the Bangka field in late 2016, but the Gendalo-Gehem field has proven to be economically challenging to develop. The $6.98-billion project at the Gendalo-Gehem Field was expected to produce 27,000 bpd of oil and 844 MMscfd of gas by 2025.
Chevron recently excluded the IDD project from its global portfolio, saying that developing the multi-billion project is economically challenging amid low oil and gas prices. However, a spokeswoman from PT Chevron Pacific Indonesia noted that the company had not made a final decision to withdraw from IDD.
Chevron’s withdrawal became the second major blow to Indonesia’s upstream oil and gas sector after Shell planned to pull out of the Masela Block in Maluku. IDD and Masela are among four national strategic projects expected to turn Indonesia as a major gas exporter by 2030.
