Pertamina warns regencies against oil, gas blockade

Nana Rukmana, The Jakarta Post, Cirebon

State oil company Pertamina lashed out on Wednesday at a plan to block oil and gas operations in 48 regencies nationwide, saying it would spark national instability.

Spokesperson for Pertamina's West Java operation Sri Kustini said here that the threat was both exaggerated and a fabrication, and would disrupt the country's political and economic stability.

"The plan is, in practice, almost impossible to carry out due to the national instability it would cause. Frankly speaking we regret the warning they have issued," Kustini said.

She was responding to the 48-member Association of Oil and Gas Producing regencies (FKPDM), which had threatened to go ahead with the blockade if the government refused to revoke the current ministerial decree on revenue split before June 1.

FKPDM accused the central government of breaching Law No. 25/1999 on Intergovernmental Fiscal Balance as the decree allows only each oil- and gas-producing regency to earn 1 percent to 2 percent of oil revenue. The law stipulates a share of 15 percent in oil revenue and 30 percent in gas revenue for the regencies.

Kustini said it was impossible for the government to comply with the threat because stopping oil exploration took time, required both skilled human resources and high technology and cost the government a lot of money.

"There are over 300 oil wells within Pertamina's West Java operation alone. If the blockade occurred, the losses we would have to suffer would be unbearable and the impact it caused would be very extensive.

"I expect the threat will not materialize and that we can hold talks aimed at finding a better solution," she said.

Kustini's office oversees the six West Java regencies of Cirebon, Indramayu, Subang, Karawang, Bekasi and Majalengka.

Also on Wednesday, Kustini said Pertamina would resume the operation of the X-Ray offshore rig situated 12 miles north of Indramayu.

There was no fixed date for the reoperation, according to Kustini.

"We are making all necessary preparations for the operation, which is hopefully to take place in the near future," she said.

The rig was operated by British Petroleum West Java Ltd., and was transferred to Pertamina in August 2000.

Kustini said based on Pertamina's estimate, the rig could produce 500 barrels to 1,500 barrels of crude oil per day.

Indonesia, a member of the Organization of Oil Producing Countries (OPEC), produces an average of 1.25 million barrels of crude oil per day.