Middle Ground Proposal for Andaman Block Management: Hybrid Onshore and Offshore

The trillions of rupiah in gas wealth from South Andaman is within sight. However, the pressing question is whether this wealth will merely pass through the open seas off Aceh, or truly come ashore and sustain the people of Aceh. Currently, the Plan of Development (POD) for South Andaman is on the desk of the Minister of Energy and Mineral Resources. There are two extreme options. First, all gas is processed offshore as proposed by Mubadala, or all is processed onshore as proposed by Aceh Governor Muzakir Manaf. Both carry risks. Jose Rizal, Chairman of the Indonesian Bumiputera Nusantara Entrepreneurs Association (ASPRINDO) and an Acehnese businessman, is urging the Aceh Governor to choose a fair middle path. According to him, a hybrid scheme is the most realistic option. “Investors are facilitated, the central government is not disadvantaged, and the people of Aceh still obtain long-term benefits,” he said in a written statement in Jakarta on Saturday, 13 June 2026. Offshore gas processing is known as FPSO (Floating Production Storage Offloading). Simply put, this is understood as a giant refinery floating in the middle of the sea. Gas is extracted, processed, and then directly loaded onto LNG carriers. This process is fast and relatively cheap for investors, but its impact on mainland Aceh is very small. The workforce absorbed might only be in the hundreds. Meanwhile, processing all gas onshore is known as OPF (Onshore Processing Facility), a land-based refinery proposed to be built in Lhokseumawe. Gas is piped from the sea to the shore and then processed in Aceh. Of course, this requires more complex infrastructure. Consequently, the capital expenditure (capex) is certainly heavier. Mubadala’s Final Investment Decision (FID) might take longer. However, the effect could generate 10,000 jobs for Aceh, cheap gas for PLN and fertiliser plants, and regional taxes circulating within Aceh. To resolve this polemic, Jose Rizal suggests taking a middle path. “Don’t put everything offshore. Don’t put everything onshore. Split it, 60% of the gas processed at the FPSO, so Mubadala as the investor is confident and the 2026 FID proceeds. The remaining 40% of the gas is piped to a mini OPF in Lhokseumawe. Enough to power the PLN Aceh coal-fired power plant and revive Pupuk Iskandar Muda. This could simultaneously open 3,000-5,000 permanent jobs for the people of Aceh,” he explained.