Pertamina condemns BP over gas leak

Pertamina condemns BP over gas leak

A'an Suryana, The Jakarta Post, Jakarta

Pertamina president Baihaki Hakim has blamed Anglo-American
energy giant BP Plc. for recent gas leaks in the Pagerungan gas
field in Madura, East Java.

He said on Tuesday the leaks were partly due to BP's
negligence in maintaining the gas pipeline.

"As a professional in the business, BP should have anticipated
a possible gas leak. However, it failed to deal with it," Baihaki
said.

The gas leaks have forced BP to shut down five gas fields in
the Pagerungan contract area, which has reduced gas supply to
100,000 million cubic feet per day (MMCFD) from 180,000 MMCFD.

According to reports, hundreds of firms in East Java that use
gas as source of energy have been badly affected by the shutdown.

BP has said the gas leaks occurred because a number of pipes
that were "worn out". The company has promised to fix the pipes
in 20 days.

Company officials were not available to comment on Baihaki's
statement.

Baihaki said BP's negligence was not tolerable because it
could seriously affect the operations of numerous companies,
including state-owned electricity company Indonesia Power, which
supplies electricity along the Bali-Java network.

He said the government should not extend the contract of BP to
manage the Pagerungan gas fields when it expires, because this
incident indicated that BP was not fully commitment to ensuring
the gas supply in East Java.

He said the government should instead give local oil and gas
firms the opportunity to run the gas fields.

Baihaki said the gas leaks should teach the government an
important lesson: that in future contracts penalties must be
stipulated for the failure to meet certain targets.

He said that Pertamina might also have to shoulder the cost of
repairing the Pagerungan gas pipelines under a "cost recovery"
mechanism.

He said the repairs would cost about US$500,000.