EXCLUSIVE: Premier still hopes to sell gas to Malaysia
Thursday, January 11 2001 - 04:30 AM WIB
British oil and gas company Premier Oil said Wednesday it still hoped to sell natural gas to Malaysia after it failed to participate in the gas sale and purchase agreement between American oil and gas company Conoco Inc., state oil and gas company Pertamina and Malaysian state oil and gas company Petronas.
Premier Oil Indonesia's president director Robin Allan told Petromindo.com the talk was in underway between Premier and Petronas on the possibility of sending gas from the former's gas fields in the West Natuna area in the South China Sea to Malaysia.
Several months ago, Pertamina and its production sharing contractor (PSC) Conoco signed the preliminary agreement with Petronas to supply the latter with natural gas from Conoco's Block B PSC contract area in West Natuna.
Under the agreement, Conoco will supply a total of 1.5 trillion cubic feet of gas over the 20-year contractual period beginning in 2001.
It was reported that Premier sought to participate in the agreement but it failed to do so because Conoco insisted to become the sole supplier, citing that it was the only one which already had certified gas reserves meeting Petronas' need at the time the Malaysian made inquiries.
Conoco's plan to "use" the West Natuna-Singapore gas pipeline, which is co-owned by Conoco, Premier and other partner Gulf Indonesia Resources (GIR), to send its gas to Malaysia angered Premier and prompted the latter's action to file arbitration proceeding in London.
Conoco, Premier and Gulf, which is a unit of Canadian firm Gulf Canada Resources Ltd, are partners in sending gas from West Natuna to Singapore.
The consortium announced on Wednesday that it had started gas delivery to Singapore Jan. 3, 2001,
Head of exploration and production division at Pertamina's directorate of PSC management M Trijana said he was optimistic that Premier would settle dispute with Conoco and Gulf out of court, calling the dispute as "small quarrel between brothers".
Allan said he was optimistic Premier would still be able to sell gas to Malaysia.
"No one is - strictly speaking - sell gas to Malaysia now because there is no pipeline (to transport the gas) yet. Conoco and Premier has been in discussion with Petronas regarding the sale of gas to Malaysia," he said.
Allan said the sale would either be in one package with Conoco or it can be done separately.
"We may not use the same export as Conoco to Malaysia, we may have a different route," he said.
He said the possibility of clinching deal with Petronas was great since Petronas owned 25 percent of Premier's operation in Asia.
He further said Premier's gas reserves had been examined by De Golyer & Mc Naughton, which certified that the reserves reached one trillion cubic feet (TCF).
Premier looked forward to having larger reserves certified, he said.
Allan said currently Premier produced 5,000 barrels of oil per day and planned to invest US$50 million in Indonesia in 2001.
Aside from planned gas sale to Malaysia, Allan said, Premier was eying more gas sale to Singapore.
"Demands in Malaysia and Singapore is increasing over the time. So we see a very bright future for our next gas sales," he said. (Alex)