Jonan`s visit to US to speed up negotiations with Freeport

Freeport has agreed to build smelter and continue its operation, Jonan said.
Jakarta (ANTARA News) - Minister of Energy and Mineral Resources Ignasius Jonans recent visit to the US was intended to speed up the process of negotiations with PT Freeport Indonesia.

"We have met the leadership of Baker Hughes General Electric (BHGE) and Schlumberger to discuss the increase in investment opportunities in Indonesia and with Freeport McMoran CEO Richard Adkerson," he said in a press release received by ANTARA here on Monday.

During the visit this time, he was flanked by a team of officials from the Indonesian embassy in Washington, the Indonesian consulates general in Houston and San Francisco, the ministry of justice and human rights, and the SKK Migas (upstream oil and gas regulator).

Jonan stated that positive developments have been made with regard to negotiations with Freeport.

Freeport has agreed to build smelter and continue its operation, he noted.

As has been known, PT Freeport Indonesia has agreed to adopt IUPK (special mining business permit) instead of Working Contract (KK) as the legal foundation for the working relations between the Indonesian government and PT Freeport Indonesia.

PT Freeport Indonesia has agreed to build the smelter within five years, or by 2022 at the latest.

"Tripartite negotiations will immediately be done involving PT Freeport Indonesia, the finance ministry and the ministry of energy, and mineral resources for a decision to be made regarding issues that have not yet been settled," he remarked.

Jonan also met ConocoPhillips to urge them to submit a complete proposal if still interested to continue exploiting South Jambi Block following its expiration in 2020.

"ConocoPhillips has given a positive response and will respond to it immediately," he noted.

Regarding gas sale and purchase contract between ConocoPhillips and PGN (state-owned gas company) that has been pending since 2013, Jonan revealed that he planned to gather all parties involved and make a decision that will not affect anyone.

On Chevron, Jonan said discussions had been made on production plan at Gendalo-Gehem in 2022 using Jangkrik floating processing unit belonging to ENI.

"We have asked SKK Migas to immediately coordinate with Chevron and ENI regarding the processing plan after 2029 as Jangkrik FPU will reach its maximum processing capacity in 2029, causing fear that gas from Chevron could not be accommodated," he stated.

He had also suggested increasing Excon production in Banyu Urip field to up to 300 thousand barrels a day and said that it may participate in the oil and gas downstream business.

"We suggested that Excon would invest in the oil and gas downstream business, including setting up gasoline filling stations and developing aromatics. Exxon had responded positively," he remarked.

At the meeting with BHGE, Jonan noted that they have offered oil and gas upstream technology to reduce drilling cost using digital technology (IntelliStream) to help in the enhanced oil recovery efforts in several old wells.

"BHGE also offered barge power plant technology for islands with low electricity ratio, such as those in Papua," he concluded.

"On our part, we have invited BHGE to participate in the development of geothermal power plants in Indonesia and they have given a positive response," he pointed out.

A positive response also came from Schlumberger when they were offered to increase its investment in Indonesia. "At the meeting with them, they conveyed their intent to invest up to US$5 billion for multi-client seismic activities in eastern Indonesian waters to establish a national data center and to cooperate with K3S (cooperation contract) contractors to manage oil and gas fields. This will be followed by the units concerned," the minister concluded.(*)

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