x Abu Dhabi, UAEFriday 28 July 2017

Mubadala gets gas deal approval

Mubadala got a boost to its overseas energy business when Indonesia gave the green light for a US$500 million offshore gas development. 

Indonesia has given the green light for an Abu Dhabi Government-owned company to embark on a US$500 million (Dh1.83 billion) gas project.

Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, had been waiting for its South East Asian energy subsidiary, Pearl Energy, and two joint-venture partners to get the Indonesian government's go-ahead for the development of an offshore gas field.

Permission for the Ruby field marks a victory for Mubadala in a region it entered only three years ago.

"Ruby is our first full-field, operated development project in Indonesia, and as such it is an important project for us to have brought to the point of sanction," said Barry O'Donnell, the regional vice president of Mubadala Oil and Gas.

Pearl Energy is to back 70 per cent of the investment in the Ruby field, with France's Total and Japan's Inpex covering the rest.

The Ruby joint venture plans to drill four wells and funnel natural gas through a 312km underwater pipeline to the shore, where Pupuk Kalimantan Timur, Indonesia's state-owned fertiliser maker, has agreed to buy the processed gas.

Progress on Ruby, which is scheduled to come online within the next two years, consolidates Mubadala's overseas energy presence.

The purchase of Pearl gave Mubadala footholds in Indonesia as well as the Philippines, Thailand, Malaysia and Vietnam.

"There are limited opportunities for private or [state oil company] players to invest in the energy sphere around the world, so Mubadala, which can build on a lot of existing Abu Dhabi expertise but hasn't built up that experience yet, has to start in on small projects before they're allowed on bigger ventures," said Samuel Ciszuk, a regional analyst with IHS Global Insight in London.

"They want to build up expertise around the world."

ayee@thenational.ae