Govt doubts ExxonMobil's goodwill<\/p>\n
JAKARTA (JP): President Abdurrahman Wahid on Friday expressed
\nsuspicion that ExxonMobil temporarily closed its gas fields at
\nArun, in restive Aceh province, to exert pressure on the
\ngovernment to renegotiate its contracts for better terms.<\/p>\n
Abdurrahman told Muslim worshipers at a mosque that he learnt
\nof such suspicions from senior government officials, but he
\ndeclined to elaborate.<\/p>\n
\"But we should not read too much into this and exaggerate
\nthese suspicions as they are merely suspicions,\" the President
\nadded.<\/p>\n
He said the suspicion regarding ExxonMobil was one of the two
\nmajor problems the government currently faced in Aceh.<\/p>\n
The other issue is the Free Aceh Movement (GAM), which
\naccording to Abdurrahman, can be solved through negotiations.<\/p>\n
Abdurrahman's controversial remarks seemed to implicitly
\nreinforce Pertamina president Baihaki Hakim's statement on
\nThursday that the state oil company might take over the
\noperations of the Arun gas fields if ExxonMobil did not reopen
\nthem by July.<\/p>\n
However, Baihaki denied on Friday ever making such a threat
\ntoward the American company.<\/p>\n
ExxonMobil also flatly denied the suspicions aired by the
\nPresident, asserting that it had been forced to close the gas
\nfields two weeks ago for safety and security reasons, following
\nthe cumulative impact of dozens of incidents.<\/p>\n
\"It is not true that we would do that. Under the contract it's
\nExxon that operates the fields,\" a senior Pertamina official
\ninvolved in talks with Exxon to get the fields reopened, was
\nquoted by Reuters as saying.<\/p>\n
\"We can only help and work with Exxon,\" he said, adding that
\nno decision had yet been made on resuming production.<\/p>\n
Separately, ExxonMobil's spokesman Bill Cummings said the
\noverriding reason for ExxonMobil's difficult decision in
\nsuspending onshore production operations in Aceh was the safety
\nand security of its employees, contractors and adjoining
\ncommunities.<\/p>\n
The closure of the economically vital fields, the first such
\nproblem since the start of their operations in 1977, has stopped
\nproduction at Aceh's PT Arun NGL liquefied natural gas (LNG)
\nplant, the country's second largest after the Bontang LNG plant
\nin East Kalimantan.<\/p>\n
Indonesia is the world's largest LNG exporter and its main
\ncustomers are Japan, South Korea and Taiwan.<\/p>\n
The military has said it would send fresh troops to the
\nprovince to help bolster security at the gas fields. It was
\nunclear if those soldiers were already in place.<\/p>\n
Pertamina, which supplies LNG to South Korea and Japan from
\nthe Arun field, claims it has lost US$10 million since the
\nclosure and could lose $100 million by April if operations remain
\nsuspended.<\/p>\n
ExxonMobil's contract with Pertamina dates from the mid-1970s
\nand gives the U.S. company the right to operate the field and get
\n30 percent of revenues from gas sales. Pertamina takes 70 percent
\nof revenues under a standard production-sharing contract in
\nnatural gas development.<\/p>\n
The Arun NGL plant, which sells its LNG to Japan and South
\nKorea, is owned by a joint venture between Pertamina, with 55
\npercent equity, ExxonMobil with 30 percent and Japan Indonesia
\nLNG Co. with 15 percent.<\/p>\n
Since the closure of its Aceh operations, Pertamina has begun
\nto source additional LNG from its Bontang plant in East
\nKalimantan. (byg)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-doubts-exxonmobils-goodwill-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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