Pertamina asks ExxonMobil for 'limited operation'
JAKARTA (JP): State oil and gas company Pertamina has asked U.S.-based ExxonMobil to resume the "limited operation" of its gas fields in Arun, Aceh, citing improved security in the area.
Pertamina president Baihaki Hakim said security had gradually improved following the deployment of thousands of soldiers to the area.
"I met with (ExxonMobil) management this morning to ask them to prepare for limited LNG operations," he was quoted as saying by Antara news agency on Tuesday, adding that ExxonMobil was evaluating the request.
According to him, if ExxonMobil began the limited operation of its gas fields, liquefied natural gas (LNG) producer PT Arun NGL would be able to resume LNG production at about 50 percent of its capacity.
"Normally, PT Arun produces 10 cargo loads of LNG per month from four train loads. If two trains can quickly resume operations, the company would be able to produce five cargo loads a month," Baihaki said.
PT Arun was forced to halt operations following ExxonMobil's decision to stop production at four of its gas fields in Arun. The U.S.-based oil and gas company halted production because of what it said were security concerns arising from the conflict between separatist guerrillas and security personnel. ExxonMobil is the sole supplier of gas to PT Arun's LNG plant.
PT Arun's closure has caused jitters on the regional LNG market, forcing LNG buyers in South Korea and Japan to scramble for alternative supplies.
A number of top executives at ExxonMobil's headquarters in the United States are in Indonesia to meet with government representatives. Their visit comes during increasing pressure from the government for the company to resume operations.
Meanwhile, Minister of Energy and Mineral Resources Purnomo Yusgiantoro told Kompas daily on Saturday that during a recent meeting he held with ExxonMobil executives, he was told some mid- level workers at the company refused to return to Aceh.
Lower-level workers, most of them Aceh natives, are ready to return to work if the government guarantees the safety of them and their families, Purnomo said.
The minister ruled out the possibility of the government taking over ExxonMobil's gas fields if the company refused to resume operations.
"The government has assured ExxonMobil Indonesia, which has stopped operations at its gas fields, that we are not going to nationalize the fields.
"The policy the government has proposed is that we take over the operations. It is not a complete takeover or nationalization," Purnomo said.
In Tokyo, Japan's Tohoku Electric Power Co. said Tuesday it has purchased alternative liquefied natural gas cargoes totaling about 627,000 metric tons after it was left dry by the shutdown of the Arun gas field in Indonesia.
"We bought two spot cargoes from Malaysia via trading houses for arrival until June," a spokesman told Dow Jones. The spot transaction was made in addition to the purchase of one Malaysian cargo made shortly after the disruption.
Tohoku also covered eight cargoes from Bontang in east Kalimantan, Indonesia, for delivery by the end of May.(jsk)