Japan Energy Giant Urged to Accelerate Rp339 Trillion Investment in Indonesia

Jakarta — The Ministry of Energy and Mineral Resources (ESDM) has urged Japanese oil and gas giant Inpex Corporation to accelerate execution of the Abadi gas field development project in the Masela Block. The government is determined to ensure the project, valued at US$20 billion (approximately Rp339.4 trillion, based on an exchange rate of Rp16,970 per US dollar), advances swiftly to the final investment decision stage.

Minister of Energy and Mineral Resources Bahlil Lahadalia commended progress on the gas field development block project, which has now reached approximately 25% completion. He urged Inpex to advance the Front End Engineering and Design (FEED) stage by the second quarter, or at the latest the third quarter of 2026, to enable the Engineering Procurement Construction (EPC) tender to proceed in parallel.

“We want this to move quickly and not be delayed further. This has taken 27 years, and I don’t want to wait until I’m 60 years old for it to be completed. Besides, this is my mother’s hometown. So I believe we can all launch the EPC tender this year,” Bahlil stated during his meeting with Inpex CEO in Tokyo, Japan.

To accelerate achieving these targets, Bahlil offered a solution regarding certainty of liquefied natural gas (LNG) production offtake from the Masela Abadi field, which reaches 9 million tonnes per annum (MTPA).

He proposed that the Indonesian Future Investment Management Agency (Danantara) purchase the gas supply for downstream development programmes if Inpex has not secured serious buyers by the end of April 2026.

“To provide buyer certainty. I respect foreign buyers, but at this time, Indonesia must be present to work together with Inpex to ensure operations. So we will purchase the gas ourselves,” he stressed.

In response, Inpex Corporation CEO Takayuki Ueda welcomed Indonesia’s push. Ueda assured that Inpex’s entire management team is deeply committed to realising the long-awaited project.

“Thank you very much, Minister, for your generosity and commitment to support this project. This is not merely my personal concern, but our entire Inpex management team also shares the commitment to accelerate the realisation of Abadi. I have personally been working on Abadi for 12 years,” Ueda said.

He noted that direct discussion with the Indonesian Government provided significant moral encouragement for the company. The company expressed greater motivation to swiftly complete the development and infrastructure construction of the gas field block.

“Not only the Minister, but we too have the same commitment to proceed with Abadi. And after discussing with the Minister, we are even more motivated to accelerate completion of the Abadi project,” he added.

From an administrative perspective, the Masela Abadi Project is progressing well with several key permits already completed earlier this year. The Environmental Impact Assessment (AMDAL) document was issued in mid-February 2026, following the Ministry of Forestry’s approval for forest area release in January.

Inpex Masela Ltd holds the largest participating interest (PI) in the Masela Block at 65%. Previously, Inpex was accompanied by Shell Upstream Overseas Services with 35% stake. However, Shell decided to exit the Abadi gas project located in Maluku.

The 35% Shell stake was acquired from July 2023 onwards by PT Pertamina Hulu Energi through its subsidiary PT Pertamina Hulu Energi Masela (PHE Masela) acquiring 20% and Petronas acquiring 15%.

The share purchase agreement from Shell to Pertamina and Petronas was signed on 25 July 2023, with the ESDM Minister’s approval for the PI transfer obtained on 4 October 2023.

The Abadi field in the Masela Block is an ultra-deepwater gas field with Indonesia’s largest gas reserves, located approximately 160 kilometres offshore from Yamdena Island in the Arafura Sea at depths of 400-800 metres. The Abadi field’s gas potential is estimated at 6.97 trillion cubic feet (TCF).

After the production-sharing contract was signed in 1998, Inpex discovered the giant gas reserve in the Masela Block in 2000. Nineteen years later, the Indonesian Government approved the first Plan of Development (PoD-I) for Inpex to produce 9.5 million tonnes of LNG per annum (MTPA) from the Masela LNG plant, produce 150 million standard cubic feet per day (MMSCFD) of pipeline gas, and 35,000 barrels per day (bpd) of condensate.

The green field (new oil and gas field) development concept, which has high complexity and significant risks, encompasses deepwater drilling, subsea facilities, floating production storage and offloading (FPSO) units, and an onshore LNG plant. This will present both challenges and significant opportunities for PHE and its partners to realise. The field development is also projected to provide employment for up to 10,000 workers.

The Masela Block is also planned to generate clean energy through the application of carbon capture and storage (CCS) technology to support the Government’s programme in reducing carbon emissions and promoting sustainability in the energy transition era.

The Indonesian Government approved the application of CCS on 28 November 2023 through the Revision 2 PoD-I. The FEED tender subsequently proceeded, culminating in Inpex’s launch of the OLNG FEED on Wednesday, 9 April 2025.

Key milestones for the Abadi Gas Field Project, Masela Block:

1998: Production-sharing contract (PSC) signed by Inpex

2000: Discovery of giant gas reserves in the Masela Block

2019: Government approval of the First Development Plan (PoD-I) to produce 9.5 million tonnes of LNG per annum, 150 MMSCFD of natural gas, and 35,000 bpd of condensate

2023: Shell’s exit, with Pertamina and Petronas taking stakes