Inpex Seeks Local Content Incentives for the Abadi Field Gas Project in the Masela Block

Inpex Masela Ltd has submitted a request for incentives related to Local Content (TKDN) for the development of the Abadi Field gas project in the Masela Block, Maluku. This was revealed by the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Djoko Siswanto, during a Coordination Meeting for the Onshore LNG Abadi Masela National Strategic Project at the Ministry of Finance.

Djoko stated that Inpex hopes for flexibility in the implementation of local content regulations, especially if the project’s economic value turns out to be below the initial assumptions. “Secondly, as you know, the Plan of Development (POD) is 13.5%. The economics now, especially since you asked for lower prices, may be below 13.5, below the common POD. Automatically, they will ask for incentives,” said Djoko during the Masela Project Debottlenecking Session at the Ministry of Finance, quoted on Wednesday (February 25, 2026).

Djoko mentioned that the incentives are not limited to fiscal aspects but also relate to the obligation to use domestic goods and services, which can significantly affect the project’s cost structure. “We will see the incentives from… Just calculate it properly if it can be cheaper, but if it’s expensive… There will be TKDN and so on. Maybe they will ask for some relaxation,” he added.

Responding to the request, Finance Minister Purbaya Yudhi Sadewa, who chaired the meeting, reaffirmed the government’s commitment to supporting the project’s smooth implementation while emphasizing the importance of transparency in cost calculations.

Purbaya asked Inpex and SKK Migas to provide accurate data regarding the incentive needs so that the government’s decisions are truly targeted and do not harm the country. “Just calculate it properly. If it can be cheaper, make it cheaper. But if it’s expensive… we’ll see,” said Purbaya.

As is known, the Abadi Field in the Masela Block is a deep-sea gas field with the largest gas reserves in Indonesia, located about 160 kilometers off the coast of Yamdena Island in the Arafura Sea with a sea depth of 400-800 meters. The gas potential from the Abadi Field is estimated at 6.97 trillion cubic feet (TCF).

The Production Sharing Contract (PSC) for Masela, which was signed in 1998 and has been extended until 2055, has the potential to produce 9.5 MMTPA (million metric tons per year) of LNG and 150 MMSCFD (million standard cubic feet per day) of pipeline gas. In addition, the Abadi Field is estimated to produce condensate production of 35,000 barrels per day.

The concept of developing a greenfield (new oil and gas field) with high complexity and significant risks, including deepwater drilling, subsea facilities, FPSO (Floating Production Storage and Offloading), and onshore LNG plant, will be a challenge as well as a great opportunity for PHE and its partners to realize it. In addition, the development of this field is also expected to absorb up to 10,000 workers.

The Masela Block is also planned to produce clean LNG through the application of Carbon Capture and Storage (CCS) technology to support the Government’s program in reducing carbon emissions and supporting sustainability in the era of energy transition.