ExxonMobil expected to resume operations in May

JAKARTA (JP): ExxonMobil Oil Indonesia Inc., the subsidiary of American energy giant ExxonMobil Inc., is expected to resume operations at its gas fields in the restive province of Aceh by the end of May and thereby revive liquefied natural gas (LNG) exports from the province.

"According to the plan, ExxonMobil will resume its (gas) operations by the end of May," Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Rachmat Sudibyo said after having breakfast with President Abdurrahman Wahid.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro was also present at the working breakfast.

ExxonMobil suspended its gas operations in the Lhok Sukon area of Aceh more than a month ago as a result of security problems arising from intensified conflict between the province's separatist rebels and the National Military and Police.

The move forced PT Arun NGL Co. in Lhok Seumawe, which relies on ExxonMobil for its gas supplies, to halt its LNG production and exports to its customers in South Korea and Japan.

Arun is 55 percent owned by state oil and gas company Pertamina, 30 percent by ExxonMobil and 15 percent by Japan- Indonesia LNG Co., which is a consortium formed by the buyers of Arun's LNG.

The cessation of Arun's LNG production will result in the government suffering US$100 million in losses for every month it continues, according to Pertamina.

The government has been continually pressuring ExxonMobil to resume its gas operations, but the company has insisted that the security situation was not yet conducive enough for the company to restart its operations.

The government has sent in more than 2,000 troops to protect the company's facility but the security situation has apparently not improved much as several gun battles between the military and separatist rebels have reportedly taken place near the facility since ExxonMobil closed down its gas fields.

Rachmat said the newly-issued Presidential Instruction No. 4/2000 calling for an orchestrated effort by military and civilian officials to restore law and order in the province was expected to create sufficiently conducive security conditions for ExxonMobil to resume its operations by the end of May.

He warned that if ExxonMobil's gas operations were still halted at the end of May, Pertamina would have to look for help from other countries in order to meet Arun's LNG export commitments to its buyers.

Up to the end of May, Pertamina could take excess LNG supplies from the Bontang LNG plant in East Kalimantan to cover the shortfall from Arun.

But, Bontang would not be able to help Arun after May due to its own export commitments.

"If we take LNG from other countries' allocations to supply Arun's customers, this means we will lose out on export revenues," Rachmat said. (jsk)