Petrochina, Bojonegoro authority to hold talks to settle dispute

Petrochina, the operator of the Sukowati oil field in Bojonegoro, East Java, will soon hold a formal meeting with the local authority to end the dispute over the operation of the oil field, the company's top executive has said.

"During an informal discussion, last night, the Bojonegoro regent agreed to soon hold a formal meeting with Petrochina to talk over the dispute," Petrochina's Vice President Administration Budi Setiadi told Petromindo on Wednesday.

Budi said that the meeting would be also attended by officials from BP Migas, the government's agency in charge of oil and gas exploration and production activities, and executives of state oil and gas firm Pertamina. "We hope, the meeting will be able to settle the dispute," he said.

Petrochina has stopped its exploration activities in the Sukowati field since March 25 due to protest from the Bojonegoro administration. The local authority forced the company to stop exploration activities after the latter refused to meet the local government's demand for a 10 percent interest in the oil field.

Although production activities at the Sukowati I and Sukowati II oil wells are continuing with production rate of 12,000 barrels per day, Petrochina said that the company had suffered significant loss due to the halt of the exploration activities.

"The halt of the operation of the oil rig alone had caused a financial loss of at least US$600,000 since the exploration activities were stopped," Budi said, adding that the rig which the company rented from other firm had been idle since then.

The Sukowati is jointly owned by Petrochina with 25 percent interest, Pertamina with 50 percent interest and Medco Energi Indonesia with 25 percent interest. Petrochina, however, acts as the operator of the oil field. (godang)