Onshore oil mining a thriving business in Bojonegoro

Onshore oil mining a thriving business in Bojonegoro
ID Nugroho
The Jakarta Post/Bojonegoro

The sound of the adzan (call for early morning prayer) has barely
ended when Sukardjan starts his day's work.

Slowly, the 50-year-old opens the lid of a well and drops a
large bucket to the bottom. "Let's begin," Sukardjan tells his
workmates.

They pull up the bucket containing a mixture of crude oil,
rocks and water and pour it into a small ditch before repeating
the movement.

Once the ditch is full they pour the collected oil into
barrels before selling it to traders.

Sukardjan is one of thousands of people in Bojonegoro, who for
years have been tapping Bojonegoro's onshore oil resources for a
living.

Studies by oil companies show Bojonegoro has potential
reserves of hundreds of millions of barrels of oil.

In Wonocolo, where Sukardjan works, people extract oil from
about 200 wells in the area, and the number of wells is growing.

"Extracting oil and farming are the two main jobs in this
regency," said Syukur, another Wonocolo resident.

The oil men begin work at 4 a.m and finish at 10 a.m. In six
hours they are usually able to collect about 400 liters of crude.

"Each liter is priced Rp 150 (0.016 U.S. cents)," Syukur said.

The price of oil they have extracted has not changed in five
years, despite turbulence in international oil prices.

"We would like an increase in the prices for the crude oil
that we have extracted. But, we don't know why this never
happens," said another miner, Sukardi.

The large reserves in Bojonegoro, East Java province, have
attracted attention from some top players in the oil industry,
including PT Exxon Mobil Oil.

"According to our estimate, the oil reserves in Bojonegoro
reach 600 million barrels," company spokeswoman Deva Rahman said.

The company is currently negotiating with the Bojonegoro
regental administration for it to be allowed to explore oil in
the regency.

Although the negotiations have not yet been settled, the
Bojonegoro regency is already making plans to host a large
international company in the area.

It has set up a company to arrange revenue sharing between the
regency and private companies wishing to explore oil.

In order to prepare human resources for the industry, it has
set up oil workshops in several districts in the regency and it
is also facilitating the establishment of technical petrochemical
engineering schools.

Rumors that an oil company will move to the regency has raised
the price of land in the area that is populated by some 1.1
million people.

Agus Segro Budiono, a resident, said that the price of land in
some places had soared to Rp 300,000 a square meter. In 2001,
the same area sold for only Rp 15,000, Agus said.

While landowners are happy, a local environmental group
expressed its concern over the likelihood of oil exploration in
the regency.

Indonesian Forum for Environment (Walhi) executive Saiful
Ashadi said any exploration would pollute the environment.

"Exploration would emit Hydrosulfida (H2S) substances into the
air, leading to air pollution," Saiful said.