Fri, 11 Mar 2005

Onshore oil mining a thriving business in Bojonegoro ID Nugroho The Jakarta Post/Bojonegoro

The sound of the adzan (call for early morning prayer) has barely ended when Sukardjan starts his day's work.

Slowly, the 50-year-old opens the lid of a well and drops a large bucket to the bottom. "Let's begin," Sukardjan tells his workmates.

They pull up the bucket containing a mixture of crude oil, rocks and water and pour it into a small ditch before repeating the movement.

Once the ditch is full they pour the collected oil into barrels before selling it to traders.

Sukardjan is one of thousands of people in Bojonegoro, who for years have been tapping Bojonegoro's onshore oil resources for a living.

Studies by oil companies show Bojonegoro has potential reserves of hundreds of millions of barrels of oil.

In Wonocolo, where Sukardjan works, people extract oil from about 200 wells in the area, and the number of wells is growing.

"Extracting oil and farming are the two main jobs in this regency," said Syukur, another Wonocolo resident.

The oil men begin work at 4 a.m and finish at 10 a.m. In six hours they are usually able to collect about 400 liters of crude.

"Each liter is priced Rp 150 (0.016 U.S. cents)," Syukur said.

The price of oil they have extracted has not changed in five years, despite turbulence in international oil prices.

"We would like an increase in the prices for the crude oil that we have extracted. But, we don't know why this never happens," said another miner, Sukardi.

The large reserves in Bojonegoro, East Java province, have attracted attention from some top players in the oil industry, including PT Exxon Mobil Oil.

"According to our estimate, the oil reserves in Bojonegoro reach 600 million barrels," company spokeswoman Deva Rahman said.

The company is currently negotiating with the Bojonegoro regental administration for it to be allowed to explore oil in the regency.

Although the negotiations have not yet been settled, the Bojonegoro regency is already making plans to host a large international company in the area.

It has set up a company to arrange revenue sharing between the regency and private companies wishing to explore oil.

In order to prepare human resources for the industry, it has set up oil workshops in several districts in the regency and it is also facilitating the establishment of technical petrochemical engineering schools.

Rumors that an oil company will move to the regency has raised the price of land in the area that is populated by some 1.1 million people.

Agus Segro Budiono, a resident, said that the price of land in some places had soared to Rp 300,000 a square meter. In 2001, the same area sold for only Rp 15,000, Agus said.

While landowners are happy, a local environmental group expressed its concern over the likelihood of oil exploration in the regency.

Indonesian Forum for Environment (Walhi) executive Saiful Ashadi said any exploration would pollute the environment.

"Exploration would emit Hydrosulfida (H2S) substances into the air, leading to air pollution," Saiful said.