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Indonesia govt, Cepu Block operator try to normalize oil production after workers riot

cepu riot 2Cepu Riot 2 Alan Soerosentiko facebook Cepu Alan SoerosentikoAlan Soerosentiko facebook - Cepu Riot


[Images: courtesy of Alan Soerosentiko facebook, shared in Migas community]

JAKARTA ( – The Indonesian government is trying to normalize oil production in oil-rich Banyuurip field, within Cepu Block in East Java after workers at a contracting company of Cepu Block ran riot at mid-day on Saturday by turning upside down a number of cars and damaging some facilities.

The riot forced Cepu Block operator to shut down the oil production at well pad B and early oil expansion facilities for a day, which could potentially causing production losses of around 50,000-55,000 barrels of oil, said director for oil and gas supervision at the Energy and Mineral Resources Ministry Djoko Siswanto.

Siswanto said the government in cooperation with Bojonegoro Regency authorities, policies and related parties are now working to address the cause of the riot and prevent it from happening again so that the production returns to normal. They are scheduled to hold meeting on Monday over the riot.

The riot occurred between workers and security officials. Local media reports that workers at a contracting company of Cepu Block have to wait and line up for minutes at gateway during break. They demanded the security officers to open other gates instead of only one gate since they only have limited lunch time. However, their demand was ignored, triggering the riot at 11.30 a.m on Saturday (Aug 1).

The picture of the riot spread quickly through social media. One picture showed a car was turned upside down, with other photos show damaging facilities.

Erwin Maryoto, vice president public and government affairs ExxonMobil Indonesia, revealed that a security incident occurred at EPC 1 of the Banyu Urip Project site on 1 August 2015.

He said subcontract workers employed through Tripatra Samsung, EPC 1 contractor, were departing the worksite around lunch hour when a disturbance evolved resulting in damage to property including vehicles and offices. Work at EPC 1 and 5 sites has been stopped and production from sites near the incident has been temporarily shut-in.

He said the current situation is under control and is being monitored and noted that the “safety and security of our workforce and facilities is our top priority.”

He said ExxonMobil Cepu Limited (EMCL) is working closely with Tripatra-Samsung, the EPC 1 contractor, police, and government agencies to address the incident.

“An investigation is underway,” he said.

“The extent of the damage is being assessed. Initial assessments indicate little to no impact to the Banyu Urip facility. Restart of EPC1 construction and commissioning activities will resume when it is safe and secure to do so,” Maryoto said.

Based on the field’s plan of development (PoD), the investment of Banyu Urip Project was set at US$2.525 billion. Of this, US$2.188 billion is required to construct production facilities and well drilling works at US$337 million.

The construction of the facilities is divided into five EPC contracts, namely EPC I (Tripatra Samsung) is responsible to construct main production facility (Central Production Facility/CPF); EPC II is in charge to develop 72-km of onshore pipelines; EPC III is in charge of constructing offshore pipeline and tower mooring; EPC IV is in charge of developing Floating Storage Offloading (FSO); and EPC V is responsible for developing infrastructure facilities.

Cepu Block was discovered in 2001. The production sharing contract (PSC) of the project was signed on September 17, 2005 with MCL acting as the operator. MCL, a subsidiary of ExxonMobil Corporation, holds 45 percent interest in the Cepu Block, PT Pertamina EP Cepu with 45 percent and the remaining 10 percent is held by JOB Cepu Block. The block is estimated to have proven reserves of 450 million barrels. (*)

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