Upstream authority SKK Migas will ask the country’s oil and gas contractors to postpone Final Investment Decision (FID) on mega projects in light of the tumbling oil prices, according to an official of the agency.
The mega projects are the Tangguh Train 3 project in West Papua, owned by the BP Plc-led Tangguh Consortium, the Indonesian Deepwater Development (IDD) project in Makassar Strait owned by Chevron Indonesia Company and the Abadi LNG plant project within Masela block in Maluku owned by INPEX Corp and Royal Dutch Shell.
SKK Migas said investment decisions for the projects should be postponed in view of the continued drop in oil price. The oil price has broken the psychological level of US$40 to the downside for the first time last week since it started falling in the third quarter of last year. It is the lowest level in six years.
“We shall ask the owners of the mega projects to tighten the belts. With the oil price now reaching the $39 level, it is time for the contractors to consider postponing the FID of the projects,” SKK Migas’ spokesperson Elan Biantoro told Petromindo.com.
“Oil won’t become stale if it remains underground. In the difficult time like this, we must first tighten the belts, be on a diet. Let no one be allowed to benefit or suffer from this difficult situation. It’s time for us to stay united in facing this problem with wisdom,” Elan said.
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