JOB Tuban commences Sukowati production test unilaterally
Monday, September 13 2004 - 07:00 AM WIB
According to the source Petrochina and Pertamina as joint operator of JOB Tuban had commenced production facilities development in Sukowati without prior consent of ExxonMobil.
Sukowati field was discovered and appraised by two wells funded by ExxonMobil (the operator of Cepu block) and JOB Tuban, with estimated recoverable resources of 25 million barrels. Around 85 percent of the reserves lie in Cepu block, while the remaining 15 percent lie in Tuban block.
Ministry of energy and mineral resources on April 2002 ordered unitization of the Sukowati and named JOB Tuban as Sukowati unit operator, based on the assumption that ExxonMobil had transferred its part of the reserves at Sukowati field to Pertamina.
?Actually, ExxonMobil had yet transferred its rights on Sukowati to Pertamina. ExxonMobil only indicated its willingness to relinquish Sukowati if Pertamina agrees to extend Cepu block contract for another 20 years. In fact, Pertamina unilaterally stopped negotiation with ExxonMobil over Cepu block contract extension. Therefore, government?s decision to give operatorship to Tuban JOB is based on faulty assumption and without hearing ExxonMobil?s opinion, ? said the source.
Cepu block is home to at least 600 million barrels of recoverable reserves. ExxonMobil is trying to get 20-year extension over the block by forming joint venture with Pertamina, which later turned ExxonMobil?s proposal for contract extension and decided to operate the block by itself when the contract expires in 2010.
BP Migas on June authorized production test of Sukowati 1 and 2 wells without ExxonMobil?s involvement. BP Migas also in July approved first phase of Sukowati field POD costs submitted by JOB Tuban without ExxonMobil?s consent.
According to the source, an estimated 170,000 barrels were produced from the Sukowati field in August.
Trijana Kartoatmodjo, a senior official at BP Migas said on Friday that BP Migas had ordered JOB Tuban to stop production and to first secure agreement from ExxonMobil. But according to the source, until last Friday production is still continuing and there is indication that Sukowati is set to produce 300,000 barrels in September.
Trijana did not say what would happen if JOB Tuban continued to defy BP Migas? order to cease production test.
The source said it was very unfair for ExxonMobil, which has 85 percent of Sukowati reserves to be excluded from any decision-making regarding development and production planning of Sukowati.
The source said ExxonMobil had sent letter to BP Migas, asking the latter to stop production pending agreement on participants and unit cost issues.
Neither ExxonMobil Oil Indonesia nor PetroChina?s officials are available for comment on the matter. (alex/godang)