Inpex Cut Jobs in Masela Block After Revision of Development Scheme

Inpex Corporation has started to reduce the number of employees working in the Masela Block. The decision fuels uncertainty over the fate of the Masela Project after President Joko Widodo chose to use the onshore scheme to develop the gas-rich block in the Arafura Sea.

Inpex, however, denied that the decision to cut jobs will threaten the continuation of the Masela Block development. Rather, the move was made in the interests of the continuation of the project and maintaining efficiency.

Inpex spokesperson Usman Slamet said that the company, along with the contractor Shell, remained committed to developing the Masela Block. Inpex has decided to reduce the workforce in order to make the project sustainable and maintain its financial viability.

Usman, however, did not say how many employees would be laid off. One thing for sure is that jobs are being cut to adjust to the needs of the current project. In doing so, he hoped the project would run on schedule. (Read: Government Prepares Local Workers to Develop Masela Block)

Usman said the company had informedits  employees of the voluntary redundancy programme. “We have informed the employees about the voluntary redundancy scheme. So these are not layoffs,” Usman told Katadata, Tuesday (19/4). Inpex has also notified the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) as supervisor of oil and gas contractors.

However, the task force’s deputy for business support supervision, Rudianto Rimbono, was reluctant to comment on this issue. He claimed that he had not been informed about the planned job cuts. “I haven’t seen the letter,” he told Katadata, Tuesday (19/4).

Earlier, SKK Migas chief Amien Sunaryadi said that he had received a letter from Inpex on 11 March regarding the company’s plans to reduce its workforce. The Japanese energy company plans to reduce its workforce in Masela by up to 40 percent. Inpex currently employs about 350 to 400 employees in Masela. (Read: Fate of Masela Block Not Clear, Inpex Threatens to Cut Workers)

Inpex had proposed a reduction in the workforce because it had not received a response from the government to its plan of development. It was not until 23 March that the President made the decision to opt for the onshore development of the Masela Block. Inpex only received notification of this decision two weeks later.

The letter asked Inpex to revise its proposed plan of development for the Masela Block to plan for the onshore refinery development. (Read: SKK Migas: Regents Not To Fight Over Masela Block Site)

The previous proposal submitted by Inpex which was based on the offshore scheme had been approved by SKK Migas. On 3 September last year, Inpex submitted a revised proposal to accommodate the increase the capacity of the floating liquefied natural gas (FLNG) facility from 2.5 million tons per year to 7.5 million tons per year to reflect the increase in existing reserves from 6.9 trillion cubic feet (tcf) to 10.73 tcf.