Exxon 'unlikely' to restart Aceh operations soon

Exxon 'unlikely' to restart Aceh operations soon

SINGAPORE (Dow Jones): ExxonMobil Oil Indonesia is unlikely to resume normal operations at its natural gas fields as promptly as senior officials at Indonesian national oil and gas company Pertamina had indicated in recent reports, sources in Indonesia said Wednesday.

Several reports quoting senior Pertamina officials have indicated a restart of natural gas operations by mid-June, with one official claiming that full production can be achieved as soon as end-June.

ExxonMobil Oil Indonesia is a unit of Exxon Mobil Corp.

Gatot Wiroyudo, senior vice-president of Pertamina upstream operations, told Dow Jones Newswires Tuesday that the Arun gas field will resume up to 25 percent of its operations in two weeks, pending a security team's report.

He also added that natural gas pumping could return to 100 percent production output by the end of June.

ExxonMobil, on the other hand, continues to maintain that it isn't in a position to give a specific timetable for the restart of natural gas operations.

"Giving a specific timetable for resumption of operations would be speculative," said an ExxonMobil spokesperson, who added that the company hopes to start up its operations soon.

The ExxonMobil spokesperson stressed that "it is a very complex process to resume production safely."

Since ExxonMobil halted Arun gas production in March, a series of mishaps have taken place at its facilities in Aceh, a restive province plagued with violence caused by separatist movement.

A flare pit at ExxonMobil's Aceh facility caught fire April 6 due to technical failure, said the spokesperson. Following that, a series of fires have hit the gas producer's warehouse and pipelines, she added.

April 12, a warehouse storing spare parts for heavy construction equipment and other material was burnt down.

In May, fires broke out at two underground gas pipelines connecting the gas field to the Arun gas liquefication plant, said the ExxonMobil spokesperson.

The damages wrought by the fires will take more than a week to repair, and lost items from the warehouse fire will need to be replaced, she added.

Meanwhile, Indonesia is urging ExxonMobil to restart its Aceh operations promptly because liquefied natural gas demand peaks over summer in North Asia, and Indonesia's Bontang production is insufficient to meet its term sale commitments.

Indonesia has lost US$10 million a month from March to May as a result of the ExxonMobil gas operations halt, Pertamina's Gatot said.

ExxonMobil was producing an average of 1.6 billion cubic feet of gas and 30,000 barrels of condensate daily before it suspended operations on deteriorating security conditions in March.