Pertamina asks ExxonMobil for 'limited operation'

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)