Locals blockading PT Caltex's oil well in Riau
Locals blockading PT Caltex's oil well in Riau
SINGAPORE (Dow Jones): A week-long disruption at PT Caltex Indonesia's oil well located in Riau province's Rokan Hilir is still ongoing, a company official said Friday.
Walter J. Maguire, Jakarta-based business development specialist for Caltex, said the oil well was producing oil normally before local youths blockaded the road leading to the oil well facility about a week ago.
"This probably results in a loss of about 1,000 barrels a day," Maguire said.
He said Caltex is currently in talks with the youths and hopes to end the blockade in the next few days.
This blockade is the latest in a string of incidents that have been going on for the past 18 months, Maguire said.
"This has been a continuing process...the number of civil disturbances, local blockades, thefts has resulted in an accumulated loss of about 40,000 barrels a day," he said.
"When we are operating normally, we produce 700,000 b/d, or about half of Indonesia's total crude oil production, so the impact of these incidents is very significant," he added
Maguire said in 2000, disruptions to Caltex Indonesia's oil production facilities resulted in a loss of 30,000 b/d and US$300 million. He said the disruptions are expected to result in a loss of 40,000 b/d and $500 million in 2001.
Indonesia's crude output in May averaged 1.234 million b/d. Maguire said in the past such blockades have been resolved after a few days with operations returning to normal barring any damage to the facility.
When asked if the week-long duration of the disruption was cause for alarm as it exceeded the expected suspension period of a few days, Maguire said he didn't expect it to last much longer.
He said when the blockade began, Caltex expected the protest to be over demands that the company employ local residents.
Maguire said the latest incident and previous incidents haven't dimmed Caltex Indonesia's interest in investing in Indonesia oil and gas exploration and production sector.
Caltex Indonesia is a part of a joint venture between Chevron Corp. and Texaco Inc..