Oil site found in Labuhan Batu

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.