ExxonMobil still uncertain about resuming operations

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)