URGENT: Hess wants to pull out from Indonesia
Wednesday, March 6 2013 - 01:13 AM WIB
American oil and gas firm Hess Corporation, which has been operating in Indonesia for many years, apparently wants to pull out from Indonesia and will divest its stakes in the country?s oil and gas blocks, including in Pangkah PSC, which is one of the major gas producers in East Java.
The firm?s leaders recently paid visits to the Ministry of Energy and Mineral Resources and upstream authority SKK Migas to express the firm?s divestment plan.
?Hess? leaders came here yesterday to tell us that the company wants to divest its stakes in its businesses outside the U.S, including in Indonesia. The reason is the firm wants to focus on its operations in the U.S,? Vice Minister of Energy and Mineral Resources Susilo Siswoutomo told Petromindo.com on Tuesday.
Susilo named Pangkah as one of the assets the firm wants to divest.
When asked if the firm will also divest its ownership in other blocks in Indonesia, Susilo said ?It seems that they want to divest all.?
Rudi Rubiandini confirmed that Hess wants to divest its stake in Pangkah but he did not mention if the firm also wants to divest all its stakes in other blocks. He said Hess has yet to officially submit a letter on the divestment plan.
Artis Waluyo, Hess Indonesia?s spokesman, was not immediately available for comments after being contacted via phones on Tuesday.
Hess is among few international oil and gas companies which are very active in Indonesia. According to the Oil and Gas Book 2013 published by Petromindo, the firm is the operator in four blocks, namely Pangkah PSC, in which it has a 75 percent stake, Semai V PSC (100 percent), South Sesulu PSC (100 percent), and Offshore Timor Sea I PSC (100 percent). It also owns non-operator stakes in another three blocks, namely Natuna Sea Block A PSC (23 percent), Kofiau PSC (42.5 percent) and West Timor PSC (49 percent).
Should Hess finally decide to pull out from Indonesia, it will be bad news for the Indonesian oil and gas industry. Foreign investors have several times voiced criticism over the deteriorating investment climate in the county, citing the growing legal uncertainties.
The pullout will also mark a drastic change of mind on the part of Hess. In June last year, John Hess, Hess Corporation CEO, told Minister of Energy and Mineral Resources Jero Wacik and his then deputy Rudi Rubiandini that Hess felt comfortable investing in Indonesia and the firm planned to invest US$200 million every year until 2018 in Indonesia.
Editing by Johannes Simbolon