Premier sues Conoco, Gulf over KL gas supply
Premier sues Conoco, Gulf over KL gas supply
JAKARTA (JP): British oil and gas company Premier Oil has
filed an arbitration suit against American oil and gas company
Conoco Inc. and Canadian oil and gas firm Gulf Resources in a
dispute over a planned multibillion dollar gas supply from the
West Natuna area in the South China Sea to Malaysia.
"We have confirmed that it (Premier Oil) filed for arbitration
against them (Conoco and Gulf)," spokesman for state oil and gas
company Pertamina's foreign contractors management body Sidick
Nitikusuma told The Jakarta Post on Sunday evening.
"However, we can ensure that the dispute will not disrupt the
planned gas supply to Singapore," Sidick said.
He, however, refused to provide details of the dispute.
The three companies are grouped in the West Natuna consortium
that will supply gas to Singapore starting next year under a gas
supply contract signed by Pertamina and Singapore's Sembawang Gas
last year.
According to mines and energy specialist website Petromindo.
Com the arbitration suit was filed by Premier some three months
ago in London and the arbitration process is still in progress.
The website says the dispute centers around a planned gas
supply from the Belanak gas field owned Conoco in West Natuna to
the gas facility in the Duyung field owned by Malaysian oil and
gas company Petronas.
Pertamina expects to sign a contract with Petronas for the gas
supply next month.
The gas contract, if materialized, will generate between US$7
billion and $10 billion in revenue for the Indonesian government
throughout the 20-year contract period, according to Pertamina's
exploration and production director Gatot K. Wiroyudo.
Gatot was quoted by the website as saying Pertamina initially
offered the three companies the chance to participate in the
Pertamina-Petronas contract, but only Conoco had a proven and
certified gas reserve.
Gulf told the website it would not participate in the contract
because there were not enough gas reserves in its gas fields in
the West Natuna area to supply to Petronas.
Premier has reportedly found gas in the West Natuna area but
it had yet to certify the gas reserve when Petronas made an
inquiry in January this year.
Conoco reportedly planned to connect its planned pipeline
stretching from West Natuna to the Malaysian territory with the
640-kilometer West Natuna-Singapore pipeline being built and
jointly owned by Premier, Conoco and Gulf.
Gulf said it could approve Conoco's plan to connect its
pipeline with the consortium's pipeline provided that the
American company pays a fee to the consortium.
Premier, however, objects to the plan and has filed an
arbitration suit against both companies for breaching the
contract on the use of the pipeline. (jsk)