ExxonMobil still uncertain about resuming operations

JAKARTA (JP): American based ExxonMobil Oil Indonesia Inc. said on Tuesday that it had no set target for the resumption of its gas production in Aceh as uncertainty in the security field persisted.

Contrary to the statements of government officials saying that ExxonMobil was expected to resume operations by the end of May, visiting ExxonMobil president for production Terry Koonce said the timing for the resumption of gas production had not been fixed.

"We really don't know when the timing will be, we can't predict when security is going to be restored," he said on the sidelines of an oil and gas exhibition organized by the Society of Petroleum Engineers.

On Monday, Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Rachmat Sudibyo said that ExxonMobil was slated to resume operating the Arun gas fields by the end of May.

Koonce said that ExxonMobil was prepared to immediately resume operations only if security conditions improved.

ExxonMobil suspended its Arun operations last month following growing security problems with local rebels fighting for an independent Aceh.

The move caused the nearby liquefied natural gas (LNG) plant owned by PT Arun NGL Co. to also halt operations after its gas supplies were cut off.

The closure has disrupted Arun's LNG exports to Japan and South Korea. If the stoppage continues, the government will be looking at losses of at least US$100 million per month.

Up to the end of May, Pertamina will be able to take excess LNG supplies from the Bontang LNG plant in East Kalimantan to meet Arun's export commitments.

Beyond May, however, Pertamina will have to buy LNG from other countries to meet these export commitments.

To beef up security measures around ExxonMobil's operational area, the government has sent in over 2,000 troops. But the security situation remains uncertain.

"We remain very concerned over the situation in Aceh," Koonce went on to say.

Nonetheless, Koonce said the trouble in Aceh had not diminished ExxonMobil's interest in Indonesia.

"We remain very interested in doing business in Indonesia, in Aceh and the Arun fields," he said.

ExxonMobil business development specialist William J. Cummings said that security conditions at the Arun fields were too unpredictable to say when it would be safe again.

"That would call for speculation for us to say we will resume operations next month, June or July." he explained.

"We want to resume production as soon as we possibly can; ExxonMobil is an oil and gas company and we're not paid to not produce," he added.

Cummings said that aside from military reports, the company judged the security situation in Aceh based on data from its surveillance teams on the ground and in the air.

"That's the way we gather information from what's happening in Aceh," Cummings said.

He added that the company was uncertain as to just how long a period of peace would be required in order to assure ExxonMobil that it was safe to return.

"We have gone from operating on dangerous ground to becoming a target," he said.

ExxonMobil frequently reported incidents of armed individuals, believed to be rebels, hijacking its trucks, shooting at its supply planes, and, recently, launching mortar attacks on its compound.

Meanwhile, Pertamina downstream director Ariffi Nawawi was quoted by Antara as saying that Pertamina had, on behalf of the government, invoked force majeure in respect of Arun's Japanese and Korean customers.

However, Director General of Oil and Gas Rachmat denied the invoking of force majeure.(bkm)