ExxonMobil production nears full capacity in Aceh

ExxonMobil production nears full capacity in Aceh

Moch. N. Kurniawan, The Jakarta Post, Jakarta

U.S.-based oil and gas company ExxonMobil Oil Indonesia Inc.
resumed on Friday the operation of its Cluster III gas facility,
the last of its four clusters at the Arun gas fields to come back
on line in troubled Aceh, which were suspended several months ago
due to security problems.

"The operation of the last cluster, Cluster III, was restarted
at 10 p.m.(Friday). Now, all clusters have gas flowing out,"
Sidick Nitikusuma, state-owned oil and gas firm Pertamina's
spokesman told the Jakarta Post.

Sidick said that as of Monday, ExxonMobil had pumped out up to
804 million metric cubic feet per day (MMCFD) of gas from the
Arun gas fields, with Cluster III gas flows at 133 MMCFD ,
Cluster I at 191 MMCFD, Cluster II at 229 MMCFD, Cluster IV at
251 MMCFD.

"It has not yet reached full production at the Arun gas
fields. It will reach the peak soon," he said.

Aside from the Arun gas fields, Exxon also operates the North
Sumatra Offshore gas field with a flow rate at 359 MMCFD, making
ExxonMobil's total gas production more than 1.16 billion cubic
feet per day (BCFD), he said.

"We hope ExxonMobil will be able to meet its full gas
production capacity by the end of the year," he added.

ExxonMobil officials were not available for comment.

ExxonMobil shut down its Arun gas fields in mid-March on
security fears as Aceh guerrillas demanding independence in the
oil rich province, turned up the violence. But the government has
since pressured the company to resume its operation and cracked
down on the rebels.

Prior to the suspension, ExxonMobil was producing an average
of 1.6 BCFD of gas and 30,000 barrels of condensate per day.

In July, ExxonMobil began to resumption of operations of the
Arun gas fields, beginning with Clusters II and I, and followed
with Cluster IV several weeks later.

Sidick said that the resumption of all Arun gas facilities
would enable the nearby liquefied natural gas (LNG) producer PT
Arun NGL to export one additional LNG shipment this month, up
from four last month.

Arun NGL restarted LNG exports to Japan and South Korea in
August with one shipment, he said.

He also expected that the Arun gas fields would be able to
restart delivery of gas to PT ASEAN Aceh Fertilizer (AAF) and
pulp firm PT Kertas Kraft Aceh (KKA) by the end of October.

"We want to see that the gas flows from all clusters," he
said.

Several companies are dependent on the natural gas produced
from Arun, and those have been hurt by the inconsistencies this
year.

When ExxonMobil halted its gas production, Arun NGL, AAF, and
KKA as well as PT Pupuk Iskandar Muda (PIM) also had to stop
their production activities. PIM resumed its production in August
after receiving 55 MMCFD from Arun.

Arun NGL has suffered some Rp 4 trillion (US$350.8 million) in
financial losses as a result of the halt in production.

It has missed the export of 40 LNG shipments during the four-
month period since ExxonMobil's operation was halted.

AAF also said it incurred losses of about Rp 264 billion
between March and June due to limited production.

AAF produced 587,055 tons of fertilizer last year, of which 99
percent, or 567,027 tons, was exported.