Japex will not buy stake in Timor Gap

JAKARTA (JP): Japanese oil company Japan Petroleum Exploration Co. (Japex) had no plans to invest in the development of a depot in Timor Gap in return for a stake in the project, a company official said yesterday.

The official refuted a statement by PT El Nusa president Aswad Dipo claiming that Japex had showed an interest in injecting funds into the depot project located in Kupang, East Nusatenggara, in return for a 20 percent stake.

El Nusa, a subsidiary of Indonesia's state oil company Pertamina, had shelved the US$9.1 million depot project owing to insufficient funds, Aswad said Thursday in a hearing with the House of Representatives Commission V for mines and energy.

According to Aswad, a group of local banks initially agreed to finance the project but could only supply $4.8 million due to the monetary crisis.

El Nusa put the project's development on hold in April this year when the depot was already 80 percent complete.

"We heard that El Nusa's depot project was put on hold due to financial difficulties, but we haven't considered financially participating in the project," the Japex official was quoted by Dow Jones as saying in Tokyo.

Under an exclusive negotiation right for the Savo block in the Timor Sea awarded in May 1997 by Pertamina, Japex has been conducting seismic explorations and reprocessing, and then evaluating the geological data on the block.

"As we've done two seismic drillings so far, we are currently reprocessing the data with a target date to complete evaluation at the end of this year," he said.

The oil and gas-rich Timor Gap, located in the Timor Sea separating Timor island and Australia, is co-owned by the Indonesian and Australian governments.

Aswad said that El Nusa's depot project in Kupang was aimed at competing with oil and gas logistical depots in Darwin, Australia.

Separately, another Japanese oil developer, Indonesia Petroleum Ltd. (Inpex) has also been conducting seismic explorations in the Rabe block in the Timor Gap where the company was awarded a production-sharing contract by Pertamina.

"Because our (Timor) project is still in the seismic drilling stage, we aren't yet interested in securing depot space, nor in investing in the depot development project," an Inpex official said. (jsk)