Gulf Indonesia: Giving the best for mutual interdependence

Sun, 06 Jan 2002

Having been one of the few multinational firms which have established transparent win-win relationships with local communities and governments in its operation areas and surroundings, Gulf Indonesia Resources pledge to continue attempts to share success to locals,

"We see our community development programs in two. First, it's part of our corporate's social responsibilities, and secondly -- at our interest -- we want to continue establishing a mutual, beneficial and interdependence relation between our company and the communities and local governments where we're operating our business," S. Santosa, Gulf Indonesia's vice president for corporate strategic development and government relation said.

"Without having such a good relationship, we cannot create a stable environment to work," he said.

"And the local people should see that our presence in their land is also useful for them."

The community development programs of Gulf Indonesia, which marked its 41st anniversary of operation in this country this year, are varied: from education to health, cultural activities, farming and infrastructure development.

Locals and authorities in its operational areas, particularly in Musi Banyu Asin district in South Sumatra, have witnessed and enjoyed the assistance, such as scholarship, training, free medical service and the building of schools, praying houses, roads and water wells.

Annually, the firm, which is 72 percent owned by Conoco since September 2001 and 28 percent listed at the New York Stock Exchange, spent some US$1 million for its community development.

"We hope that we could build an endless good relationship with commoners, intellectuals and local authorities, starting from those in the subdistrict level, municipality to the provincial office," Santosa explained. "We also need local intellectuals as these figures play significant roles in shaping public opinion."

An independent upstream company engaged in exploration, development and production of oil and gas, Gulf Indonesia operates under a production-sharing agreement with Pertamina in three core areas: Sumatra, the Natuna Sea and East Java.

According to Santosa, the Gulf Indonesia's community development programs cover three major sectors, namely education, economic empowerment for the local community and developing social infrastructures.

"Education is our top priority since it's very important for the future of the locals," he said.

In 2001 alone, the company has participating in building a number of schools, a school dormitory, scholarships for 4,000 students from primary to high schools, and similar financial supports for university students, including those who're preparing their final papers.

"Also, we provide honorarium to teachers in the remote areas who fail to receive payment from the government," Santosa went on.

To help boost the economy of the locals, Gulf Indonesia have in the past two years sponsored the on-job training for some 80 locals to Sukabumi in Bogor, West Java, to learn farming and husbandry.

"Under the supervision of senior tutors in Bogor, they learned many agricultural-related things, such as how to farm, run a fish pond, and raise chickens and goats," Santosa said. "From there, we then provide them some initial working capitals to start business. And it works with a success ratio of around 70 percent."

The well-trained locals do not only employ others, but also indirectly share their knowledge and know-how to neighbors, friends and other villagers, he said.

The same thing happened to 20 local women, who the company sponsored to take a sewing class.

"We hope that this group can one day handle the procurement of our uniforms," he explained.

Santosa said that Gulf Indonesia of course could not provide jobs to everyone in a village. "But always try to generate self- employment for them in which we -- in cooperation with various parties, including intellectuals from Sriwijaya University -- are still looking for appropriate methods."

In 2002, for instance, Gulf Indonesia will try to train some local farmers to breed bees and improve their techniques in planting rubbers, oil palms, and snake-skin fruit.

"We also plan to introduce home industry business to the villagers since we realize that not all of them, who come from different background and culture, have interests in agriculture," Santosa noted.

Apart from its regular programs, the firm also arranges sort of MOUs with locals, including the authorities, leading figures and youths, in which the villagers have the responsibility to help secure Gulf Indonesia's assets and operation in the respective areas.

In return, the company will meet the locals' request, such as building a school or a mosque.

"We see it as a mutual commitment," Santosa said, adding that his firm in 2001 has signed MOUs with five villages. "Our operational areas are so big and scattered which we could not handle on our own. The MOUs will lead villagers to have sense of belonging on our assets and therefore they always help secure our properties from aliens."

For the local administration, Gulf Indonesia regularly funds the training of five staff to the firm's headquarters in Jakarta where they learned details of the oil business, its contracts, the counting and the local's shares.

"We often hold seminars for them. We want the local administration to see us as an open and transparent company," Santosa went on. "We have nothing to hide"

"From our side, we just want them to be our partner,"

T.M. Razief Fitri, the firm's service and external manager, added: "We find the scheme works very well since all our wells and pipes are safe. There's no oil being stolen."

Santosa said that the same programs will be expanded this year.

Throughout most of its history, Gulf Indonesia has been a crude oil producer until its first natural gas production from the Corridor Gas Project in South Sumatra in October 1998.

The company, which 72 percent of its shares previously owned by Gulf Canada Resources Limited, currently has interests representing 11 million gross acres in 13 onshore and offshore contact areas in Aceh, Jambi, South Sumatra, Natuna, and several spots in the eastern part of Java and near Lombok.

Besides South Sumatra, Jambi and Natuna, the others areas are still under exploration.

Its total daily production reaches 33,000 million barrels of oil and 280 million cubic feet of gas.

"We're a growing company with our production estimated to double in the next three or four years, partly due to the massive sales of our gas," Santosa said.

Headquarters: Wisma 46, Kota BNI, 29th floor, Jl Sudirman Kav. 1, Jakarta 10220, Telp: (021) 574 2120, Fax: (021) 574 2122, e-mail:

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