Bumi allocates $16 million for oil exploration

Bumi Resources, formerly known as Bumi Modern, has allocated about US$16 million in cash to start exploration at the newly acquired oil blocks in Yemen, the company's spokesman Lalu Mara Satria said.

"The Yemeni government has issued a permit to Bumi to carry out the exploration works," Mara was quoted as by Neraca daily as saying on Thursday. He said that the exploration would start later this month.

The company's president Jay Alatas said that Bumi Resources would also cooperate with foreign oil companies to boost exploration activities in the newly acquired oil field. "We are still involved in negotiations with an owner of a major oil concession in Indonesia to take over the oil field," he said. But he refused to name the company.

Bumi Resources, a part of the Bakrie Group, recently issued rights shares worth Rp 9.3 trillion to take over Gallo Oil (Jersey) Ltd, which has massive oil interests in Yemen.

Alatas said that that more than 90 percent of the rights shares issued during the limited public offering were purchased by Long Haul and Minarak Labuan as standby buyers. This has caused the dilution of the Bakrie ownership in the company to 5 percent from about 52 percent previously.

After the takeover, the standby buyers, Long Haul and Minarak, own 73 percent and 22 percent respectively in Bumi Modern.

But sources said that the takeover of the oil company by Bumi Modern is only part of the business consolidation made by the Bakrie Group, which also owns the majority stake in Long Haul and Minarak. Such asset consolidation is needed because Bumi Modern, formerly known only as a small property company, is the only company that could be used by Bakrie to settle the group's massive debts to the Indonesian Bank Restructuring Agency (IBRA). (*)