Caltex resumes operations at three burned oil wells

Caltex resumes operations at three burned oil wells

SINGAPORE (Dow Jones): PT Caltex Pacific Indonesia has restarted pumping operations at three of the four oil wells knocked off line Nov. 6 in Riau province by fires set by local protesters, Robert Galbraith, senior vice president of CPI's Sumatra operations, told Dow Jones Newswires on Wednesday.

The four wells in the Batang oil field together produced about 300 barrels a day of crude, although initial estimates of the production loss were in a range of 500-1,000 barrels a day.

Galbraith said three of the four wells have started pumping again. The fourth well accounts for 75-125 b/d.

The fourth well should be back online "in the next day or so," he said.

The cost of the damage to the wells is about US$210,000, while the estimated cost of lost production has been estimated at $50,000.

The fires were set by a farmers' group upset about the level of compensation for CPI's use of the land.

CPI's managing director Gary Fitzgerald said last week that the owners of the land have been compensated, but that users of the land were demanding the same level of compensation.

Part of the compensation to the landowners was to be passed on to the users of the land, he said, and the conflict is actually between the owners and the users of the land.

CPI is caught in the middle, he said.

Galbraith said CPI's operations continue to be disrupted on a daily basis by "sporadic blockades," which have cost CPI about 30,000 b/d in lost production this year.

CPI's current production stands at about 695,000 b/d, he said.

CPI has been the target of recurring protests at its Riau operations since April, with local groups seeking employment or better job benefits.

CPI is a joint venture of Chevron Corp. and Texaco Inc.