Unocal Corp continues with Sarulla project

JAKARTA (JP): Unocal Geothermal of Indonesia Ltd, a subsidiary of United States Unocal Corp, is continuing to develop a Sarulla geothermal power plant in North Sumatra although the project has been canceled by the government.

Company vice president and general manager Olin D. Whitescarver told The Jakarta Post Thursday the company was continuing on with the project in the belief that the monetary crisis would soon be over and the government would then give the go-ahead to the project.

"We are doing everything for the project so that we are ready to move ahead when the government is ready to move ahead," Whitescarver said.

He said there was no slowdown in the companies activities at Sarulla.

Unocal is developing the 330-Megawatt Sarulla project with the state oil and gas company Pertamina and PT Parama Geopower, an affiliate of the Nusamba Group.

The project is among 15 megaprojects canceled or put under review by President Soeharto last month as part of efforts to deal with the monetary crisis.

The project was first canceled by the government last September along with tens of other projects, but Soeharto issued a decree in November allowing 15 of them, including the Sarulla project, to continue.

After the September cancellation Unocal aggressively lobbied the government to continue the project, saying it was feasible and that the company had invested a lot of money in it.

But since the second postponement last month Unocal has held back from pressuring the government to continue it, Whitescarver said.

"The recent postponement has more to do with the relationship of the Indonesian government and the IMF (International Monetary Fund)," he said.

"We feel we don't really want to put pressure on the government until it's the right time to move ahead," Whitescarver said.

He said Unocal had not yet suffered financial losses due to the cancellation but admitted this was possible if the project was postponed too long.

"But, we are looking forward a little bit more positive on this project.

"This monetary crisis came on very quickly and we hope it goes away very quickly," he said.

The company has invested US$60 million in the project.

The Sarulla project is scheduled to come on stream by 2000.

The company recently announced that it had completed development of one of the world's largest geothermal wells -- the Silangkitang 1-3 well -- at Sarulla. (jsk)