Development of Timor Gap depot put on hold
JAKARTA (JP): PT El Nusa, a subsidiary of state oil and gas company PT Pertamina, has put on hold the development of a logistical depot in Kupang, East Nusa Tenggara, designed to support oil and gas exploration in the Timor Gap, due to lack of funds.
El Nusa president Aswad Dipo said the US$9.1 million project was 80 percent complete when it was put on hold in April.
"We are now waiting for a new investor to inject fresh funds," Aswad said during a hearing with House of Representatives Commission V for mines and energy, industry and trade, manpower, environment, investment and cooperatives.
The project is being developed by PT Timor Nusa Adipersada, which is 70 percent owned by El Nusa and 30 percent by PT Sarana Graha.
A group of local banks, led by IFI Bank, initially agreed to provide the $9.1 million loan for Timor Nusa, but could only extend $4.8 million due to the monetary crisis, Aswad said.
Japanese oil contractor Japex has expressed an intention to inject supporting funding into the project in return for a 20 percent stake but has yet to realize the proposal.
Aswad said the project was designed to compete with oil and gas logistical depots in Darwin, Australia, to capitalize on growing oil and gas operations on the Timor Gap.
The oil and gas-rich Timor Gap, located in the Timor Sea separating Timor island and Australia, is co-owned by the Indonesian and Australian governments.
Several oil and gas contractors are operating in the area, including a consortium involving Phillips Petroleum Co. Ltd. and Broken Hill Pty. (BPH) Co. Ltd. in the Bayu Undan field containing 350 million barrels of hydrocarbon liquid and three trillion cubic feet of natural gas.
BHP and its partners are also developing the Elang and Kakatua oil fields in the area containing 15 million stock tank barrels.
Maintenance
Aswad also said El Nusa was currently suffering cash flow problems because Pertamina had yet to pay Rp 260 billion (US$18.5 million) to the company in fees for maintaining its refineries.
He said the maintenance fees initially totaled Rp 410 billion but Pertamina had already paid Rp 150 billion.
"We have notified Pertamina that we will stop maintaining the refineries if it does not pay the arrears in the near future," Aswad said.
Pertamina has said it has arrears amounting to $800 million to oil and fuel importers, shipping companies, gas and other contractors. The company said it could not meet its financial obligations because the government has yet to reimburse it for fuel subsidies amounting to Rp 11 trillion.
El Nusa has signed contracts with Pertamina to maintain seven of its nine refineries for two years, until next year.
El Nusa, which is among Pertamina's most profitable subsidiaries, is 51.5 percent owned by Pertamina and 48.5 percent by PT Tridaya Esta. Tridaya Esta is 50 percent owned by former president Soeharto's son Bambang Trihatmodjo. Bambang reportedly sold his stake in Tridaya Esta to PT Cakrawala Tata early this year. (jsk)