Local communities and administrations are questioning the social benefit of oil and gas exploration on the border between East and Central Java, three years after ExxonMobil Ltd began operations in the region. Villagers at each of the four exploration sites in Banyu Urip, Ngasem, and Bojonegoro have taken to the streets in protest at employment policies adopted by the Oil and Gas Implementing Agency (BP Migas).
They accuse BP Migas of underemploying local workers in local infrastructure development projects.
Supporting the protests, local regency administrations have asked both BP Migas and ExxonMobil to give priority to local workers, in accordance with their skills.
ExxonMobil spokeswoman Deva Rahman asked the public to consider the joint operating agreement carefully.
Saying she was shocked by the protests, Deva argued Pertamina and BP Migas were responsible for handling infrastructure development projects in the contract area.
"Physical development is the domain of BP Migas. We handle oil and gas exploration," she told The Jakarta Post recently, adding ExxonMobil was strongly committed to its corporate social responsibility (CSR) program, including employing locals and empowering local partners and furthering investment in oil and gas exploration.
"Just as we do in other developing countries worldwide, ExxonMobil will help improve health, education and economic growth in and around our contract areas in the two provinces," she added.
The U.S.-based energy holding company signed a joint operating agreement (JOA) with state-owned oil and gas company Pertamina for the Cepu contract area back in September 2005.
According to the JOA, Pertamina and ExxonMobil each hold a 50-percent interest in the Block Cepu contract, with an eventual 10-percent holding by a regional entity representing the two provinces' administrations.
Two ExxonMobil subsidiaries, Mobil Cepu Ltd. and Ampolex Cepu Ltd. (MCL), are currently exploring the 1.670-square-kilometer oil and gas fields in Banyu Urip, Sukowati, Jambaran and Alas Tua.
Discovered in March 2001, Banyu Urip is believed to contain more than 250 million barrels of oil, with the field expected to produce up to 165,000 barrels of oil per day, at peak production.
MCL spokesman Primantoko said his company's corporate social responsibility program looks to improve health, education and economic growth in Bojonegoro regency.
His company is in the midst of studying proposed development programs to help empower local communities in all regencies covered by MCL's core operations, he added.
"The community development program has to be designed jointly with recipients, to make it useful for the public at large. We began it long before the oil and gas fields started production," Primantoko said.
As examples, Primantoko cited MLC's construction of a public clinic in Gayam village and public polyclinics in Ngringinrejo and Sumber Tlaseh villages, the latter requested by locals.
MLC also assists farmers in pumping water from the Bengawan Solo river to irrigate farmlands, in addition to helping them start a traditional market to spur growth in the regency's agriculture sector.
With respect to education, starting this November, MCL will pay for 500 one-year subscriptions to The Jakarta Post and Newspaper in Education (NIE), as part of its contribution to six junior high and high schools in the regency, he added.
MCL's acting public affairs manager Rexy H. Mawardijaya said the CSR program was based on environmental impact studies (Amdal) related to oil and gas exploration that were conducted jointly with the government and an independent institution.
Separately, a local environmentalist criticized the government and ExxonMobil for promoting the minor benefits of oil exploration to locals while hiding its negative impacts on the environment.
"Apart from polluting the air, oil and gas exploration is believed to exacerbate drought because it will require ground and river water to drive pumps in the oil fields," chairman of the Indonesian Forum for the Environment's (Walhi) East Java Branch Bambang Catur Nusantara said.
He urged the government and ExxonMobil's subsidiaries to make all necessary preparations for handling environmental problems caused by exploration.
Bojonegoro Regent Suyoto said his government has prepared for all positive and negative impacts of exploration on the local community, the government's economic programs and the environment.
"We have implemented several regulations on employment, education, health and economic contributions to maximize the benefits and avoid negative impacts from mining," he added, when asked recently to comment on the potential impacts of oil exploration in the regency.
