ExxonMobil keeps operating despite Thursday's incident

ExxonMobil keeps operating despite Thursday's incident

Moch. N. Kurniawan, The Jakarta Post, Jakarta

Oil and gas producer ExxonMobil Indonesia Inc. will not shut down
its gas fields in troubled Aceh province despite an ambush by
unidentified armed men on Thursday that killed one employee of
the company's contractor, a company spokeswoman said on Friday.

"We will continue to operate based on our standard security
procedures ... We have taken necessary measures to safeguard the
life of our employees," said Julia Tumengkol.

A convoy carrying employees of ExxonMobil and its contractors
in the South Lhoksukon area, part of ExxonMobil's Arun gas fields
in North Aceh regency, was attacked by gunmen at 8.30 a.m.,
killing one person.

There were no other casualties in the incident, Julia said.

She said that the company had demanded the police investigate
the case thoroughly.

Security has been a major concern for ExxonMobil's oil and gas
operation in Aceh as local rebel fighters continue their long
struggle to separate the oil-rich province from Indonesia.

ExxonMobil was forced to shut down its Arun gas fields in mid-
March on security fears arising from the activities of local
rebels, causing the nearby Arun LNG plant also to halt its LNG
(liquefied natural gas) production.

This caused disruption of the country's LNG supply to major
export markets in Japan, South Korea and Taiwan, prompting the
foreign buyers to seek new suppliers in other countries.

The supply was partly secured again in August after ExxonMobil
had resumed operation of the Arun gas fields in mid-July and fed
its gas to the Arun LNG plant.

The gas fields in the South Lhoksukon area had just resumed
operation recently.

Julia said that at present, ExxonMobil was preparing to
stabilize gas production at the South Lhoksukon facility and also
to resume the Pase gas operation.

She also said that the Arun gas fields operation had yet to
meet its normal production level of around 1.6 billion cubic feet
(bcf) per day.

So far, ExxonMobil is producing about 1.2 bcf to 1.3 bcf per
day from some parts of the Arun gas fields and the North Sumatra
Offshore block.

But the Thursday killing incident might raise worries once
again, especially for the Korean and Japanese LNG buyers, over
the security of LNG supplies from the Arun facility.

Japan is Indonesia's largest LNG importer, followed by Taiwan
and South Korea. These countries signed long-term LNG contracts
with Indonesia.

ExxonMobil delivers 90 percent of its natural gas production
to PT Arun NGL, the operator of the Arun LNG plant, while the
remaining 10 percent is supplied to fertilizer firms PT Pupuk
Iskandar Muda and PT ASEAN Aceh Fertilizer, as well as pulp firm
PT Kertas Kraft Aceh.