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ConocoPhillips, the third-largest U.S. oil company, may be
allowed to keep its exploration rights in the Warim block in Papua,
even though most of its concession overlaps with a forest conservation
area, an official says.
The director general for upstream commercial oil and gas development at
the Energy and Mineral Resources Ministry, Priyono, said Thursday in
Jakarta that the ConocoPhillips contract was among 12 contracts that
had been reviewed by the government as the operators had failed to
develop their blocks within the required 10 years of the signing of the
contracts.
Oil and gas director general Luluk Sumiarso said last week that the
government planned to revoke the contracts of 12 operators this year as
they had failed to meet the exploration deadlines set out in the
contracts. However, he refused to identify the 12 operators.
"We are still reviewing each of the cases. We will listen to their
arguments and see whether the problems lie on the government side, such
as, for example, a case where the concession is actually located in a
conservation area. If this is the case, we will then seek solutions,"
Priyono said.
He cited the Warim block, which is located in the Lorentz National Park
in Papua as an example of a case that needed further consideration.
"Not all of the 12 contracts will be terminated, provided the operators
have a commitment to developing their blocks but have been faced with
these types of hurdles. We cannot pin the blame solely on them in such
circumstances," he said.
Oil exploration and drilling operations in a forest conservation area
are prohibited under the 2001 Forestry Law.
However, under a subsequent amendment put through as an emergency
regulation, companies that secured licenses for the development of oil
and gas blocks, or mining concessions, prior to the enactment of the
2001 law will be allowed to operate in protected forests provided that
they make an up-front payment amounting to twice the ecological value
of the protected area being exploited.
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