Shell Said to Be Investing $25b in Indonesia: Jero

Royal Dutch Shell plans to increase its investment in Indonesia to $25 billion in the next 10 years to develop oil and gas fields, according to Energy and Mineral Resources Minister Jero Wacik.

The investment by the Anglo-Dutch energy company will be allocated for the development of oil and gas blocks in Masela, in Maluku province as well in as other regions.

Masela Block is estimated to have 18.47 trillion cubic feet of proved and probable gas reserves, as certified by consultants DeGolyer & MacNaughton.

Peter Voser, outgoing chief executive of Shell and Shell’s newly appointed chief executive, Ben van Beurden, presented Shell’s major investment plan to President Susilo Bambang Yudhoyono at the Naval Academy Building in Surabaya on Saturday.

Voser, whose employment ends on Dec. 31, took the opportunity to say farewell to Indonesia’s president, and introduced his successor Van Beurden, who will take his place on Jan. 1.

“I appreciate that a CEO of his caliber, who resides overseas, wants to say goodbye to the president of Indonesia. We have to maintain a relationship with Shell,” said Jero.

The Indonesian government said it welcomed Shell’s plans to transfer the company’s technology in converting engines on Indonesian ships to operate on gas instead of diesel.

“Imagine thousands of ships, large and small, running on gas instead of diesel. The economic effect would be tremendous,” said Jero.

During the meeting, Yudhoyono mentioned that Indonesia needs to develop renewable energy technologies to reduce its dependency on imported fuel.

Shell has been operating in Indonesia since 1880, following its first oil discovery in Pangkalan Brandan, North Sumatra. It is one the almost ten companies operating in the Indonesia’s oil and gas business.

Shell Indonesia, the local subsidiary of Royal Dutch Shell Group, is currently building a lubricant oil manufacturing plant in Indonesia.

The plant costs $200 million and is being built on 75,000 square meters of land in Marunda, North Jakarta.

The facility is expected to produce 120,000 tons of lubricants per year, supplying a range of high quality lubricants for the consumer, transport, industrial and marine markets locally.

Since Indonesia’s gasoline station market was deregulated and state energy company Pertamina stripped of its monopoly, Shell has been aggressively expanding its presence across Java.

Its first branded outlet opened in Karawaci, Banten province, and the company now boasts more than 40 throughout the Jakarta region as well as in East Java.

The company’s public relations department declined to comment on discussions with the Indonesian government.