BP migas seeks to settle dispute
The Jakarta Post, Jakarta
Oil and gas upstream authority BP Migas is seeking to settle a dispute involving oil and gas companies ExxonMobil, Pertamina and PetroChina over production tests at the Sukawati oil field in East Java.
"BP Migas has invited the disputing parties for a talk to solve the dispute on Friday," Trijana Kartoatmodjo, BP Migas' deputy of operation, told The Jakarta Post on Wednesday.
The dispute centered on production tests currently being carried out by joint venture JOB Tuban, comprising among others state-owned Pertamina and China's PetroChina, at the Sukawati oil field, which is believed to have oil recoverable resources of 25 million barrels.
Around 85 percent of the resources reportedly lie in the Cepu block, owned by ExxonMobil, while the remaining 15 percent is in the adjacent Tuban block, owned by JOB Tuban.
According to Petromindo.Com, the production tests have been carried out without prior consent from ExxonMobil.
In April 2002, the Ministry of Energy and Mineral Resources issued a decree to unitize the Sukowati field and appointed JOB Tuban as the operator on the assumption had transferred its part of the reserves at the Sukowati field to Pertamina.
"Actually, ExxonMobil has yet to transfer the rights on Sukowati to Pertamina. ExxonMobil only indicated its willingness to relinquish Sukowati if Pertamina agrees to extend the Cepu block contract for another 20 years.
"In fact, Pertamina unilaterally stopped negotiations with ExxonMobil over the Cepu block contract extension. Therefore, the government's decision to give operatorship to JOB Tuban is based on faulty assumption and without hearing ExxonMobil's opinion," the website quoted a source as saying.
Pertamina recently announced it had refused to extend ExxonMobil's contract on the Cepu block, which is believed to contain at least 600 million barrels of oil. The contract is due in 2010.
JOB Tuban had reportedly pumped up an estimated 170,000 barrels from the Sukawati field as of August.
Trijana admitted that at the request of Pertamina, he had recently sent a letter asking JOB Tuban to stop the test production, but the joint venture is continuing its test production with a target of hitting the 300,000 barrel mark by the end of this month.
"It is not easy to immediately stop production. Thus, we can understand why production is continuing," Trijana said.
When contacted via cellphone, JOB Tuban's general manager Alfian refused to comment, saying he was not sure that the caller was from the Post.