Analysis: Can Hashim’s group succeed in Indonesia’s toughest gas block?
PT Nations Petroleum, an oil and gas company linked to businessman Hashim Djojohadikusumo, President Prabowo Subianto’s younger brother and special climate and energy envoy, has committed US$103.3 million to three years of work on the Natuna D-Alpha block, prompting questions over why the relatively new player is willing to take on such an ambitious bet.
T Nations Petroleum, an oil and gas company affiliated with businessman Hashim Djojohadikusumo, President Prabowo Subianto's younger sibling and special climate and energy envoy, has pledged US$103.3 million towards the development of the Natuna D-Alpha block over a three-year period. This significant investment has raised questions regarding the rationale behind the relatively new company's decision to undertake such a complex and ambitious project.
The Natuna D-Alpha block is one of the largest undeveloped gas resources in Indonesia, which has remained unexploited for decades. The challenge lies in the high content of carbon dioxide (CO2) in the gas, making the technical and commercial aspects of developing the block particularly daunting.
Industry experts suggest that Nations Petroleum, despite its substantial financial commitment, is a nascent and untested player in the industry. They argue that the company might require the support of a major international partner to provide essential technology and financing necessary for the successful development of the D-Alpha block. This speculation has generated doubts about the company's financial and technical capabilities to handle such a challenging project.
The history of the Natuna D-Alpha block dates back to 1980 when Pertamina and Esso Natuna, a subsidiary of ExxonMobil, signed a production sharing contract (PSC). Pertamina and Esso Natuna held equal 50 percent shares until 1996 when Pertamina transferred a 26 percent interest to ExxonMobil's Mobil Natuna, resulting in ExxonMobil acquiring a 76 percent stake and Pertamina retaining 24 percent.
The contract was eventually terminated after the contractor failed to submit a feasibility study proving the commercial viability of the D-Alpha block within the agreed timeline.
In 2008, the government transferred responsibility for the block to Pertamina in hopes of reviving its development with the involvement of international partners. In 2010, Pertamina formed a consortium with ExxonMobil, France's Total, and Malaysia's Petronas to take on the challenge of developing the Natuna D-Alpha block.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
