BPMIGAS reminds potential buyers of Arun assets to prioritize PIM

By Godang Sitompul

BPMIGAS, oil and gas upstream sector authority, has reminded potential buyers of Arun field, satellite fields as well as the North Sumatra Offshore (NSO) gas field owned by ExxonMobil to prioritize gas allocation to fertilizer plant PT Pupuk Iskandar Muda (PIM).

ExxonMobil is in the process of selling those assets. A number of companies have expressed interest to purchase the assets including PT Medco Energi Internasional Tbk, state oil and gas company PT Pertamina, and PT Intera Arun Energi which is jointly bidding the assets with PT Ratu Prabu Energy Tbk, and PT Energi Mega Persada Tbk (EMP).

Gde said whoever wins the bid to purchase those assets, the winner should be committed to maintain LNG supply to the fertilizer plant.

Currently, PIM receives certain volume of gas from Arun LNG plant through a gas swap deal with Bontang LNG plant. Under the swap deal, PIM receives gas from the Arun LNG plant, while Arun LNG plant?s supply commitment is covered by Bontang LNG plant.

Gas from those planned divested fields is processed at Arun LNG plant, the oldest LNG plant in the country. Currently, Pertamina holds 55 percent stake in Arun LNG plant, ExxonMobil owns 30 percent and a consortium of Japanese buyers owns 15 percent. Pertamina plans to modify the LNG plant into LNG receiving terminal.

?I hope that buyers of the ExxonMobil assets should be fully aware of this specific situation during the due diligence before they buy those assets,? Gde said.

ExxonMobil is currently assessing the bids of the potential buyers of its assets. Petromindo.com sources said that ExxonMobil might announce the winner of those assets divestment in the second week of February.

Exxon?s oil, gas operations in Aceh has been exporting gas since 1978 in the form of LNG that was processed at Arun LNG plant. ExxonMobil also supplies gas to local fertilizer plant. It decided to sell the assets as production has been consistently declining due to depletion of reserves.

At its peak in 1994, the Arun Field produced about 3.4 BCFD of gas and 130,000 barrels of condensate per day (1989).

Editing by Roffie Kurniawan