ARMI takes over Shell's gas block

ARMI takes over Shell's gas block

JAKARTA (JP): The government has approved American company
Atlantic Richfiled Muriah Inc.'s (ARMI) acquisition of the Muriah
gas block off the coast of Central Java from Dutch energy company
Shell, state oil and gas firm Pertamina said on Monday.

Pertamina spokesman Ramli Djaafar said Shell sold its 100
percent stake in the 7,200 square kilometer Muriah block, but he
did not provide the value of the transaction.

The block includes the Kepodang gas field, which was
discovered in the early 1980s and is estimated to be able to
yield about 400 million cubic feet (mmcf) of gas, Ramli said in a
statement.

ARMI, which is a subsidiary of American energy company
Atlantic Richfield Company (ARCO), plans to develop the Kepodang
field, including supplying gas from the field to the Tambak Lorok
power plant owned by state electricity company PT Perusahaan
Listrik Negara on the north coast of Central Java starting in
early 2000.

ARCO, which has been operating in the country for 30 years, is
currently involved in 10 production sharing contracts (PSC). It
also is the country's biggest gas supplier to the domestic
market, with supplies of 600 mmcf of gas per day to Java from its
offshore Kangean and Northwest Java blocks.

Ramli said ARCO was trying to market another 1.5 trillion
cubic feet of gas from the two fields.

According to data from Pertamina, with the sale of the Muriah
block, Shell, a subsidiary of oil company The Royal Dutch/Shell,
now operates two oil and gas blocks in the country; the Sembawang
II block and the Bukat block, both off the coast of East
Kalimantan.

ARCO has aggressively expanded its business in the country
over the past two years. It signed two PSC contracts last year on
the East Arguni block and the West Arguni block, both in Irian
Jaya.

ARCO recently announced it would lay off 50 percent of its
employees, reducing its workforce to around 900 people by the
middle of the year in order to boost efficiency. However, company
president Leon Codron said the company would expand its business
in the country despite the reduction in its workforce.

The company will proceed with its US$4 billion Tangguh
liquefied natural gas project in Irian Jaya, where ARCO, with
British Gas and other partners, has found more than 18.3 trillion
cubic feet of proven and potential natural gas reserves. (jsk)