Tuesday, April 12, 2005

Autonomy rift disturb PetroChina

PetroChina’s oil and gas drilling activities in Bojonegoro, East Java, Indonesia is not resumed yet despite central government’s appeal to let the China company to continue its operation.

In a move to pave the way for PetroChina to resume its operation, Indonesian energy minister Purnomo Yusgiantoro had sent a letter to Bojonegoro administration saying local government is strictly forbidden to intervene and disturb oil and gas activities.

Purnomo said yesterday that there should be no problem anymore regarding PetroChina’s drilling activities. But Bojonegoro administration insists it will not allow such activities until PetroChina give 10% share in the company. Bojonegoro government reiterated yesterday that under Autonomy Law, local government should get 10% share for new oil and gas exploration activities.

Currently, PetroChina and Pertamina (Indonesia’s state-owned oil and gas company) engaged in oil and gas business in Bojonegoro, producing around 7,000 barrels of oil per day from two oil wells. Since March 25, 2005, Bojonegoro government blocked drilling activities for two new wells in Sukowati area.

The PetroChina’s case is another big test for Indonesia, which at one side needs to attract more investment in oil and gas businesses while on the other side have to deal with new autonomy rule.

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