Friday, November 25, 2005

Cepu conflict is getting silly

In the last few days, top executives of state-owned oil and gas company PT Pertamina stated repeatedly that it would drill giant Cepu oil wells straight early next year should the negotiation with ExxonMobil fail to resolve the dispute on operatorship (who operate the block).
Petroleum engineers and those who are familiar with oilfield operation might found such statements as ridiculous. In fact, the president of Pertamina, Mr Widya Purnama, is an electronic engineer, who has limited knowledge about oil and gas operations. But he is a die hard type of leader.
Pertamina is frustrated with the situation that energy department rejects its proposal to have rotating system applied in the project. Today, Widya said that Pertamina would start drilling 40 oil wells in Cepu by February 2006 with investment up to US$120 million. It is too bad that fellow journalists failed to digest what's wrong with the statement.
Technically, you don't have to be a petroleum engineer to understand, no way that Pertamina could drill oil wells by February, while it takes months even to prepare the paperworks. They would need few more months to lay the pipelines in the ground if they're lucky to get faster clearance on land permits.
Even if they could do that in three months, wait a minute, is it legal in the first place?
Pertamina and Exxon signed the Cooperation Contract (KKS) with Upstream Oil and Gas Regulator (BP Migas) in October. If Pertamina move on with the drill straight strategy, what might be the respond from BP Migas, local administrations, residents?
How about Exxon? Well, as the KKS is a legal binding document, BP Migas almost unlikely to let Pertamina drill the oil wells without consent from Exxon. If they do that, Cepu project would end up in international arbitrary like previous high-profile cases i.e. Karaha Bodas and Cemex.
The oil and gas block in East Java is co-owned by Pertamina, Exxon, and a company to be established by local administrations with share ownership of 45%, 45%, and 10% respectively. The block has more than 700 million barrels of oil reserves (some even predicted 1 billion barrels). At peak, Cepu could produce 170,000 bpd. But commercial production is pending on negotiation on operatorship. Exxon claimed it has been appointed as the operator through the memorandum of understanding (MoU) signed in June by Martiono Hadianto (President Commissioner of Pertamina), Aburizal Bakrie (Chief Economic Minister), and Exxon.
Martiono was the leader of government-sponsored Negotiation Team consisted of Iin Arifin Takhyan (director general for oil and gas at the energy department), Umar Said (Pertamina commissioner), Mustiko Saleh (vice president director Pertamina), Lin Che Wei (then expert staff for minister of state-owned enterprises), Roes Aryawijaya (deputy minister SOE), Rizal Malarangeng and M. Ikhsan (expert staffs at the chief economic minister office).
But look at how these guys easily change their minds. I support the nationalism sentiment on the issue. But I hate people without principles. These guys should have fight all the way through the MoU and KKS, but if they had agreed on something, stick to it. The leaders should ask team members whether they agree or disagree before striking a deal with third party like Exxon.
What we have now, conflicting statements between Pertamina executives and between ministers, is just make things worse for all of us. No way we could be a core nation with such periphery mentality. Oh, poor Indonesian.
It is mentality driving a man on to perfection and forcing him to utilize all knowledge in the loving service of his race.

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Blogger Abah Skywalker said...

I do agree with you. We are as silly as a goat. Fall onto a hole more than twice. Its sad but its a fact..

November 26, 2005 9:16 PM  
Anonymous Indera said...

Dear Sir,
If you look closely, Mr. Widya Purnama is the guy who fight hardest in Karaha Bodas and Cepu case. Thats why he was overridden. If you were in his position, and you find many things were wrong (he was not involved in the beginning), at least you can shout it out loud instead of following rules, holding principles (which was based on dirty set-ups and mark-up) and lead a safe cozy life. It is not only a matter of holding principle and stick to your words, but it is about doing the right thing.

October 10, 2006 1:30 PM  

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