BP Migas questioned role over Ambalat

Tony Hotland, The Jakarta Post, Jakarta

Prior to its scheduled meeting with Oil and Gas Regulatory Implementing Body (BP Migas) and the Ministry of Energy and Mineral Resources, the House of Representatives questioned the role of those bodies in preventing the ongoing dispute between Indonesia and Malaysia over the Ambalat offshore oil field.

Legislator Tjatur Sapto Edy from House Commission VII overseeing energy, mineral resources and environmental affairs said on Tuesday that BP Migas and the energy ministry should have been aware of the possibility of a dispute over the oil field.

"Petronas opened the tender for exploration in Ambalat in 2003. The open bidding was announced to prospective investors all over the world," he said.

"Why weren't BP Migas, the ministry's director general of oil and gas, or (state oil and gas company) Pertamina aware about the issue in the first place? Why did they start buzzing about the concession after Malaysia announced the (tender) winner?"

Tjatur said that if those domestic institutions in the energy sector knew about the tender in the first place, there could have been official protest letters sent to Malaysia to prevent the bid from going through -- a bid which international oil giant Royal Dutch/Shell won.

He also suggested that the House urge the government to put Shell on a "blacklist" along with other companies from participating in any oil tenders here in the future.

"However, it all depends on the results of the scheduled meeting with the two bodies. If we smell something fishy about Shell's involvement in the case, we'll urge the government to blacklist the firm," he told reporters.

Apart from questioning BP Migas and the energy ministry, Commission VII will also try to speak with Shell and Petronas later this week about the divisive issue.

Indonesia and Malaysia have been involved in an intense dispute over the possession of the Ambalat block, after Malaysia's state oil company, Petronas, awarded Shell the concession rights to exploit it.

Indonesia awarded a similar contract to another multinational oil giant Unocal on Dec. 12, 2004.

Previously on Sept. 27, 1999, Shell was awarded a production sharing contract by Indonesia to explore the area, but the company terminated the agreement on Oct. 4, 2001, and handed over the concession to Italian oil producer Eni.

Some local media groups here have speculated that Shell handed over the award after allegedly finding a small amount of reserves, but then turned around and participated in the Petronas tender after learning of the large amount of oil and gas reserves there.

BP Migas estimates that the oil deposits in Ambalat could range from 100 million barrels to one billion barrels.