Angry farmers set fire to four Caltex oil wells in Rokan Hilir
JAKARTA (JP): Oil and gas company PT Caltex Pasific Indonesia said on Tuesday that protesting farmers had set fire to four of its oil wells in Rokan Hilir regency, Riau.
Caltex spokesman in Riau Poedio Oetomo confirmed the incident, saying that a group of 30 people started the fires on Monday.
By Tuesday morning, firefighters had managed to extinguish the fires but production activities at the four oil wells remained closed, he added.
He said that the police had dispersed the mob and were now securing the area. No injuries were reported during the incident, he added.
"The wells will remain closed for approximately four days," Poedio told The Jakarta Post over the phone.
The incident at the four wells is the latest in a series of protests staged by local residents against the oil giant since the fall of former authoritarian president Soeharto in 1998. Most of the protesters were demanding higher compensation payments for land acquired by the company during Soeharto's era.
Blockades at some of the company's oil rigs staged by a group of people seeking jobs earlier this month caused a drop in the company's production level of between 15,000 and 20,000 barrels of oil per day (bpd) from its normal production of about 700,000 bpd.
Poedio said the four wells had a total production capacity of between 800 to 1,000 bpd.
The fires, he said, also damaged the wells' service equipment.
Four days of production losses in addition to the necessary repairs could cost the company a total of $240,000, he added.
According to Poedio, the farmers who started the fire were apparently disappointed by Caltex's unwillingness to pay higher compensation for the land.
He added that Caltex denied them the compensation because they had failed to forward authentic documents of their claims.
"We've already paid some farmers compensation totaling Rp 5 billion (about US$555,000)," he said.
Poedio said that it had not been decided whether Caltex would resume negotiations with the protesters.
With an oil output of 750,000 bpd, or 80 percent of the country's total oil production, Caltex is the largest oil producer here.
Caltex, a joint venture between U.S oil companies Chevron Corp. and Texaco Inc., currently operates four oil blocks in Riau: CPP, Rokan, Mount Front Kuantan and Siak.
State oil and gas company Pertamina has said that the continued protests against Caltex would eventually led to a decline in its oil output.
Head of Pertamina's managing and development body of production sharing partners (BPPKA) Herucokro said last week that because of the possible decline in its oil output, Caltex might not be able to help Indonesia meet its OPEC quota.
Separately, Riau Police spokesman Superintendent S. Pandiangan said on Tuesday that security officers had arrested five people believed to have instigated the incident.
The five were identified as Opu Taruli Panjaitan, 60, Evi Boru Manurung, 26, Jitu Panjaitan, 28, Tambelan Surbakti, 40, and Erwan Surbakti, 35.
They were being held at Bengkalis police station for further questioning, Pandiangan said.
Preliminary investigations showed that the mob set the oil wells on fire because they were disappointed with the compensation given to them for their land which had been acquired by Caltex, Pandiangan said.
"It is believed that the people were disappointed with the compensation given to them for their expropriated land, thus instigating them to commit arson," Pandiangan was quoted by Antara as saying.
He said the mob placed a bundle of firewood above one of the wells, splashed it with kerosene and then set it ablaze. The fire caused the motor electronics and the control panel to malfunction before spreading to the adjacent wells. (bkm/rid)