Exxon, Santos plan to stop two separate Indonesia oil projects

Exxon Mobil Corp, the world’s largest publicly traded oil company, and Australian energy company Santos Ltd plan to stop developing two separate oil projects in Indonesia, government and company officials said. Exxon may pull out from the Gunting oil block in Jombang, East Java province because of “social issues”, R Priyono, head of Indonesia’s oil and gas regulator BPMigas, said by telephone from Jakarta today. Exxon won drilling rights at the block in 2008, he said. “The local residents don’t want any oil drilling because of fear from the Lapindo case,” Elan Biantoro, a spokesman at BPMigas, told reporters. “People are often blocking roads to the project to stop Exxon from conducting seismic surveys.”

An mud eruption in May 2006 in Sidoarjo displaced about 40,000 people. The mud started flowing after a blowout in the Banjar Panji well drilled by Lapindo Brantas Inc. Separately, Santos is re-evaluating the cost of developing the Jeruk field at Sampang block, offshore east Java, said Meiti Wajong, president director at Santos Indonesia’s unit. “Santos may not develop Jeruk field at Sampang block because the field is not economically viable to be developed,” BPMigas’ Biantoro said. Santos, that won the drilling right in 2006, owns 45 per cent stake in Sampang block, with Singapore Petroleum Co owns 40 per cent and Cue Energy Resources Ltd 15 per cent.