Pertamina Fears Loss Of Long-Term Contracts

Published March 22nd, 2001 - 02:00 GMT

Indonesian state oil firm Pertamina said on March 21st that it feared losing billions of dollars worth of long-term natural gas supply contracts due to the closure of gas fields in the Aceh province. Exxon Mobil Corp.  

 

had closed three fields ten days ago over security concerns, halting output at Aceh’s PT Arun NGL liquefied natural gas (LNG) plant, the country’s second largest.  

 

Indonesia is the world’s biggest LNG exporter and the closures have forced utilities in Japan and South Korea to find alternative suppliers.  

 

The only Asian OPEC producer relies heavily upon oil and gas sales to ease its budget deficit.  

 

A senior Pertamina official said that: “Indonesia could lose billions of dollars in income from lost LNG contracts with the stoppage of production at Arun because the main issue is security which is very complicated to resolve.”  

 

The official did not say whether any customers had threatened to break their contracts, although Indonesian Oil Minister Purnomo Yusgiantoro insisted on March 20th that the deals could not broken even due to supply disruptions.  

 

Yusgiantoro had traveled to the Exxon Mobil gas fields to assess the security situation in the province, and the helicopters carrying the minister and other officials were struck by gunfire.  

 

Exxon Mobil said on March 20th that it would resume output once the security situation improved, but said that it was too early to set a time frame for the reopening. 

(oilnavigator)  

© 2001 Mena Report (www.menareport.com)

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