Local Government in Indonesia Blocks Access to PetroChina Oil, Gas Wells

JAKARTA - A local government in Indonesia has blocked access to 14 oil and gas wells at a block in central Sumatra operated by a local unit of PetroChina Co., an official at the country's upstream oil and gas regulator said Monday, further highlighting the problems investors are facing as the country struggles to prop up its crude-oil production.

"Crude-oil production at the Jabung Timur [Block] is still going on. Only access to the wells is being blocked," Elan Biantoro, spokesman for SKKMigas, told Dow Jones Newswires.

SKKMigas is a unit of Indonesia's Ministry of Energy and Mineral Resources tasked with overseeing the upstream oil and gas sector.

Still Mr. Biantoro said SKKMigas is concerned that the blockage is obstructing maintenance work at the wells, which could undermine their safety.

He added that SKKMigas has sent a team to negotiate with the local government, hoping that access to the wells, which produce a combined 1,500 barrels of oil equivalent per day, will be opened.

Kompas daily quoted Sudirman, spokesman for the Tanjung Jabung Timur government office, as saying they are blocking access to the wells because they haven't issued "location permits" for them and PetroChina International Companies Inc. (Indonesia) failed to honor an agreement to sell natural gas to a power plant owned by the local government. Mr. Sudirman, who like many Indonesians goes by only one name, couldn't be reached for confirmation.

However, Novie Latanna, spokeswoman for the local subsidiary of PetroChina, said in a press release that the existing wells already had location permits.


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