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SKKMigas chief Johannes Widjonarko. Image courtesy of Eusebio Chrysnamurti/ inilah.com.

Chevron’s $12 billion Indonesia Deepwater Development (IDD) gas project is facing a nearly two year delay as the company waits for a revised budget to win government approval.

Indonesia’s oil and gas regulator, SKKMigas, said Thursday that the project may be pushed back by 18 months.

The length of the delay depends on the completion of a tender for the project’s floating production units, Reuters said.

“The IDD project will be delayed and we’re currently taking steps to alleviate this,” SKKMigas chief Johannes Widjonarko said.

The projected start date of 2016 has not been changed yet.

Earlier this month Chevron pressed ahead with the development of the IDD’s first field, Bangka, that will be tied into facilities at the West Seno field.

Four other fields- Gendalo, Gehem, Maha and Gandang- will be produced with two large floating production units.

The fields are in water depths ranging from 2,500 to 6,000 feet in the Katal Basin.

Chevron holds an 80 percent operating interest in the fields and Italy’s Eni holds the remaining 20 percent.

The project has overrun its initial cost estimates and four production sharing contracts tied to the project are also due to expire in 2020.

Chevron may be holding off on its final investment decision for the IDD project, Upstream said.

However, in a recent SEC filing Chevron said it is planning to make a final investment decision in 2014 pending government approvals.

Peak daily production from the IDD is projected at 1.1 billion cubic feet of natural gas and 31,000 barrels of condensate.

The IDD project will be Indonesia’s first ultra deepwater gas development.

The project center around two large floating production units that will be deployed to the Gendalo and Gehem fields.