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Chevron CEO meets with President Widodo over IDD project, legal issues

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CEO of Chevron John S. Whatson pays courtesy call to President Joko Widodo

JAKARTA (rambuenergy.com) – Top executives of Chevron on Friday paid a courtesy call to the Indonesian President Joko Widodo to discuss various issues, including the ongoing US$12 billion worth of Indonesia Deepwater Development (IDD) project in Makassar Strait and legal issues that are being encountered by some employees of the company at its Sumatera operation.

Coordinating Minister for the Economy Sofyan Djalil said among agenda that was discussed was how to accelerate the IDD project, the first major deepwater project being developed in Indonesia.

“In principle, Chevron is still committed to invest in oil and gas projects in Indonesia, in particular the IDD project in Makassar Strait. The IDD project development will resume after last year it failed to get approval (from the government),” Minister Djalil told reporters at the State Palace, as reported by Metrotvnews.com.

He said the IDD project is considered strategic for Indonesia given that the existing oil reserves will deplete in 11-16 years, should there be no additional reserves were found. Moreover, the project is huge as it will require an investment of no less than US$12 billion.

The Chevron delegation was led by Chief Executive Officer (CEO) John S. Whatson. He was accompanied by Senior Vice President Upstream of Chevron Corporation Jay Johnson, President Director of Chevron Asia Pacific Exploration and Production Melody Meyer, Managing Director of Chevron IndoAsia Business Unit Chuck Taylor, President Director of CPI Albert Simanjuntak and Senior VP PGPA Chevron IndoAsia Business Unit Yanto Sianipar.

The Energy and Mineral Resources Minister Sudirman Said said that the government will review the IDD project to make it more effective and efficient.

Recently, Chevron said it has postponed the development of the IDD project as it needs to recalculate the cost of investment. It was also seeking to extend its production sharing contract (PSC) much earlier, which is yet to be approved by the government.

Chevron is yet to issue statement about the fate of the IDD mega project. In October last year, the company (Chevron Pacific Indonesia), submitted request to the Indonesian government to delay the IDD project.The request was made due to changes in the projects commercial viability.

The IDD project investment plan has been revised several times. In 2008, the project cost was estimated at US$6 billion and further increased to US$12 billion in 2013.Chevron secured a plan of development (PoD) approval from the government in 2008. The project involves four production sharing contracts (PSC), namely Ganal, Rapak, Makassar Strait and Muara Bakau.

The Makassar Strait PSC will expire in 2020. Chevron has requested the government to extend the Makassar Strait PSC to 2028, so that the four PSCs will expire at the same time.

Commenting on the legal issues, Minister Djalil said that the President will look at the case, but gave no further details.

Some executives of CPI and its contracting firms are facing court proceedings over bioremediation case. Bioremediation is a process that uses biological organism to remove or neutralize pollutants.

The Jakarta Corruption Court (TIPIKOR) has sentenced the director of environmental services of PT Green Planet Indonesia, Ricksy Prematuri, and director of construction service firm PT Sumigita Jaya, Herlan in Ompo, to five and six years in jail, after finding that both executives were guilty of causing state losses.

The court verdict stated that Green Planet carried out the testing of the oil-polluted soil characteristic wrongly as well as applied wrong bacteria to neutralize the pollutants.

Four employees of CPI, Bachtiar Abdul Fatah, Endah Rumbiyanti (environmental manager), Kukuh Kertasafari (team leader) and Widodo are now facing court proceedings.

 

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