Govt, ExxonMobil fail to reach agreement on gas operations

JAKARTA (JP): The government failed on Wednesday to reach an agreement with American oil and gas giant ExxonMobil on the timetable for the resumption of production at the company's gas fields in Arun, Aceh.

Company executive vice president Bill Scuggins told reporters the company still needed to further discuss matters with the government before deciding whether to resume operations of the gas fields, which the company closed last week due to security concerns.

"We shall continue our discussions with the minister," Scuggins said after a meeting with Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

Scuggins refused to comment further on the meeting or discuss the company's plan regarding the closed gas fields.

Scuggins flew from the United States to meet government representatives following mounting pressure from the government on the company to resume operations.

Purnomo was earlier quoted by the local media as saying that the government expected to make a final decision on the fate of ExxonMobil's gas fields in the meeting with top executives from the company's headquarters.

The president of state oil and gas company Pertamina, Baihaki Hakim, who accompanied Scuggins in the meeting, told reporters ExxonMobil was interested in resuming operations of the fields but would only do so if the situation in the vicinity of the fields returned to normal.

"ExxonMobil said if the situation around the fields was as secure as two months ago, it would resume operations," he said.

The suspension of gas production by ExxonMobil has forced liquefied natural gas (LNG) producer PT Arun NGL Co, which relies on the company for its natural gas supply, to stop production as well as LNG shipments to South Korea and Japan. (03)