Pertamina may acquire greater stake in Cepu<\/p>\n
JAKARTA (JP): American-based oil and gas company ExxonMobil
\nOil Indonesia Inc. may sell more than 10 percent of its stake in
\nCepu's giant oil block in East and Central Java to state oil and
\ngas company Pertamina, according to an executive at the state
\ncompany.<\/p>\n
Pertamina director for production-sharing contracts Iin Arifin
\nTakhyan said on Wednesday that ExxonMobil had indicated it was
\nready to offer Pertamina more than its initial proposal of 10
\npercent of its stake in Cepu.<\/p>\n
"We (Pertamina) are negotiating for a higher stake, by the end
\nit will come down to a compromising figure," Iin said.<\/p>\n
Pertamina and ExxonMobil are now in talks over the ownership
\ncomposition of the Cepu block.<\/p>\n
The American company recently announced the discovery of an
\nestimated 250 million barrel oil reserve in the block.<\/p>\n
ExxonMobil officials have claimed the block may be capable of
\nproducing 100,000 barrels per day by the year 2004.<\/p>\n
ExxonMobil develops the field under a technical assistance
\ncontract (TAC) between its subsidiary Cepu (Mobil) Limited with
\nPertamina.<\/p>\n
Last Month, Pertamina's president Baihaki Hakim demanded more
\nthan 10 percent shares in Cepu for Pertamina.<\/p>\n
Baihaki charged that Cepu's previous owner, PT Humpuss
\nPatragas, took over the block from Pertamina through what he
\ncalled a "hostile takeover."<\/p>\n
TAC contracts have gained a bad reputation for often being
\nabused by politically well-connected businessmen to access the
\noil and gas sector.<\/p>\n
Pertamina transferred Cepu to Humpuss in 1990, which at the
\ntime was controlled by former president Soeharto's youngest son,
\nHutomo Mandala Putra.<\/p>\n
Humpuss later sold its shares to ExxonMobil.<\/p>\n
Natuna<\/p>\n
Iin also said Pertamina planned to offer Thailand gas supplies
\nfrom ExxonMobil's East Natuna gas fields, located in the South
\nChina Sea.<\/p>\n
"Gus Dur is planning a visit there (Thailand), that's when we
\nwant to offer them our gas," Iin said referring to President
\nAbdurrahman Wahid by his popular nickname.<\/p>\n
Development of the East Natuna gas field, also known as the
\nNatuna D-Alpha gas project, has been postponed due to the absence
\nof a buyer.<\/p>\n
Containing a high concentration of carbon dioxide, the gas
\nfield is deemed too risky for development until Pertamina can
\nfind a feasible market.<\/p>\n
Iin said East Natuna has total reserves of 140 trillion cubic
\nfeet (TCF), of which 72 percent contain carbon dioxide.<\/p>\n
He added however that the remaining 45 TCF of gas, is still a
\nsizable reserve.<\/p>\n
According to him, Malaysian state oil and gas company Petronas
\nis eying gas supplies from East Natuna, with early talks
\nunderway.<\/p>\n
Petronas had told Pertamina it might need up to 1 billion
\nstandard cubic feet of natural gas per day by the year 2010, Iin
\nsaid.<\/p>\n
Iin further said that Pertamina and the government were
\nmulling extending the production-sharing contract held by Anglo-
\nAmerican oil and gas company Beyond Petroleum (BP) on the Kangean
\ngas field offshore Madura, East Java.<\/p>\n
BP is seeking an early extension of the contract which expires
\nin 2010 he said.<\/p>\n
He said BP was interested in supplying gas from its Kangean
\ngas field to cover a predicted gas shortage by the year 2004 in
\nEast Java.<\/p>\n
However, he added, without a contract extension of at least
\nanother 20 years, this project would be unfeasible.<\/p>\n
The investment cost is estimated to run at $300 million, for
\nwhich the remaining 10 years of BP's contract is too short to
\nmake a feasible return.<\/p>\n
Iin said Pertamina and the government understood the reason
\nbehind BP's request, but they feared they would raise suspicion
\nof corruption by meeting the company's request.<\/p>\n
He said a decision was hard to make, as an early contract
\nextension wouldn't look good, "politically".(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-may-acquire-greater-stake-in-cepu-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}