Oil site found in Labuhan Batu

The Jakarta Post, Medan

With positive indications that there is oil in Labuhan Batu, North Sumatra, a giant U.S. oil firm hinted on Tuesday that it would start drilling in the regency early next year.

"We have prepared some US$15 million to start drilling in Labuhan Batu in early 2003," the site manager of PT Caltex Pacific Indonesia (CPI), Tjatur Sunu Hartantyo, said while presenting the preliminary results of a survey before officials of the North Sumatra provincial administration and Labuhan Batu, Asahan and South Tapanuli regency administrations.

The fund, he said, was in addition to US$6 million allocated to finance the survey.

Tjatur said he was optimistic that other potential oil sites could be found as the survey, which will end at the end of this year, had covered less than 10 percent of a total 4,300 square kilometers of the company's exploration site in the area.

Caltex is the fourth company to survey the area -- which covers Labuhan Batu, South Tapanuli, Asahan and a part in Riau province -- after three other companies failed to find anything.

The other three companies to survey the area were Union Oil in 1969, Amoco in 1979 and Enterprise Oil in 1988.

Starting up operations in the 1950s, Caltex has become the largest oil and gas company in Indonesia, with some 100 oil fields in Riau.

The head of the North Sumatra office of the Ministry of Mines and Energy, Wasington Tambunan, said Caltex surveyed the area after winning an open tender to explore the site.

"The company has signed a 30-year contract to explore the site," Tambunan said.

He said that if the oil project continued, some 3,000 workers, 30 percent of them local people, would be given jobs.