The Oil Company which I am being assigned through Secondment by Saco Law through its Holding Company, is in the face of Commercial Production. It is really exiting since we are all busy in preparing the arrangements as to how to implement to get the oil Production from below the Ground around 500 meters to carry and moved it to the Terminal Port for lifting to the Tanker of the Buyers. Well, it is really interesting since, cash and funds are needed to transport and move such Crude Oil from the Oil Field to the Terminal Port.
Moving such oil can be done through pipeline facilities, however, funds are need to built such pipeline facilities. If we are intending to use existing pipeline of other Oil Companies in the Working area, in reality it is not that easy since quality of the Oil which we are intending to flow through such pipeline must meet the quality oil of the existing producing Oil Companies who are already using such pipeline facilities.
The temperature of the oil has to be high with a certain degree of level so that the oil could still move and being transported through such pipeline facilities. Bankers who are financing oil Companies needs to see the real oil products being actually sold to the Buyers.
Bankers will only disburse a certain amount of funds needed by the Oil Company for the working capital and will only further disburse if the Oil Companies can show the Oil Products really being sold to the Buyer at the Terminal Port of Point of Sales.
Accordingly, there have to be business strategy by the Oil Company, as to how to show the Bankers of the realization of such Sales of Oil.
If the process of using the Pipeline facilities still needs a long time for realization, the alternative way out has to be made, which among others are by using Trucks to carry such Crude oil from the Oil Field to such Terminal Port. There must also be Storage tankers needed to store such Crude Oil before lifting to the Tankers.
This may initially be more costly compared to using the pipeline facilities. But since, we are competing with time to show the Bankers on the Sales of the Oil to the Buyers, we may than choose using Trucks as the first priority action to be taken by Oil Companies who are in the early stage of growth. in building their Financial Strength.
This is really challenging for us including fo the Oil Business Commercial Lawyer to prepare the required contracts to stipulate the terms and conditions for implementing this business strategy.
Good and Well Team work are needed to make these challenges become real and executable. We have to be professional and focused on the Goals and Priorities. These are really challenging operations experienced by us involved in the Oil Business Operations in Indonesia.
Cheers
Agung S.Suleiman
Jakarta 3rd February 2011
