BP Migas questioned role over Ambalat

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.