Pertamina says security at Arun gas fields improving
Pertamina says security at Arun gas fields improving
JAKARTA (JP): Security conditions around the Arun gas fields
in Aceh have improved, raising an expectation that American oil
giant ExxonMobil Oil Indonesia Inc will soon resume its gas
operations, according to state oil and gas company Pertamina on
Friday.
Pertamina downstream director Ariffi Nawawi said he had been
informed about the "improved security conditions" but he was
unsure whether that would create enough confidence for ExxonMobil
to resume its operations.
"If ExxonMobil takes the initiative, we will be producing LNG
(liquefied natural gas) again by the end of this month," Ariffi
told a media meeting.
He added the timing depended largely on whether ExxonMobil
felt it was safe enough to return to Aceh.
ExxonMobil suspended its gas operations early in March,
following increasing harassment by armed groups, believed to be
local rebel forces.
The decision cut off natural gas supplies to the nearby LNG
plant, PT Arun NGL Co, disrupting both the latter's LNG
production and shipments to South Korea and Japan.
So far, Pertamina has made up for the shortage by using excess
LNG supplies from the Bontang LNG plant in East Kalimantan.
Beyond May, however, Pertamina will have to buy LNG from other
countries to meet its export commitments.
Indonesia risks losing LNG exports worth some US$100 million a
month if LNG production at PT Arun remains at a standstill beyond
May.
According to Ariffi, ExxonMobil staff are already in the field
assessing the situation and preparing for a quick resumption of
operations once the company gives the go-ahead.
"They've come up with a detailed plan, and have appointed
their people, which isn't easy, to do the job," he said.
Ariffi said the start-up process of ExxonMobil's gas fields
would require about two weeks of preparation beforehand.
"Afterwards, the gas will enter the Arun LNG plant, at which
point it would take another week to produce LNG," he explained.
Exxonmobil spokesman Bill Cummings admitted that "substantial
progress" had been made by the team comprising ExxonMobil and
Pertamina in evaluating security conditions and technical matters
for the resumption of its operation.
"ExxonMobil and Pertamina have a number of teams that are
studying the safest and most efficient way to restart operations
in Aceh," he was quoted as saying by Dow Jones.
"We are anxious to resume operations," he said, adding that
the company had to be given security assurances for both its
staff and facilities before restarting Arun gas production.
The company had said earlier that it was monitoring security
conditions through reports from its staff in the field, the
military, and from air surveillance.
However, it was uncertain as to just how long a period of
peace would be required in order to assure ExxonMobil that it was
safe to return.
ExxonMobil frequently reported armed individuals hijacking its
trucks, shooting at its supply planes, and even launching mortar
attacks at its compounds.
"The security problem is more an issue of confidence, our
boldness to start operating under present conditions," Ariffi
continued.
He said the government and the military were seeking to
convince ExxonMobil to return to Aceh. However, he emphasized
that the government had given no deadline for ExxonMobil to
resume its gas operations.
Asked how Pertamina's buyers had been reacting to the drawn-
out uncertainties of their LNG supplies, he said they had thus
far shown a supportive attitude.
"The buyers actually understand our situation 100 percent,
there is no problem with them," he said.
He added that Pertamina had been helping Japan and Korea in
finding (LNG) supplies from other sources.
Pertamina and Japan, he said, would meet next week to discuss
the country's LNG supply for June, when Bontang's excess capacity
was expected to run out.
Japan takes around 70 percent of Arun's LNG exports, with the
remainder going to South Korea. (bkm)