ConocoPhilips Indonesia'€™s vice president for development and relations, Joang Laksanto, said current world oil prices, which had declined by almost half, had forced the US oil and gas giant to carry out efficiency measures in various sectors, one of which was by not extending work contracts.

'€œCurrently, the oil price has fallen by almost half. We are facing a situation in which production costs remain unchanged but product prices have declined by almost half, causing an almost 50 percent decline in our income,'€ said Joang.

'€œThat'€™s why we decided not to extend expiring work contracts for the sake of efficiency,'€ he went on.

Joang said ConocoPhilips was committed to not extending expiring work contracts despite protests against the policy.

During an incident on May 7, ConocoPhilips workers and local residents occupied Palmatak Airport, which is operated by the company, to protest its decision not to extend the contracts of 17 local employees.

'€œAlthough there have been requests that local workers be accommodated, I, on behalf of the company, have also requested that local leaders allow us to implement our policy [on contracts],'€ said Joang.

ConocoPhilips'€™ contract policy was introduced in February. By April 30, the contracts of 21 of the 317 ConocoPhilips workers in Anambas had not been extended, its workforce in South Sumatra was reduced from 500 to 230 while 49 of its 383 Jakarta workers were not given contract extensions. (ebf) (++++)

Clarification from ConocoPhillips Indonesia (as of Friday, May 15, 2015)

We would like to clarify the report made by The Jakarta Post as there are some inaccurate information that may cause misperception:

1. ConocoPhillips Indonesia has not laid off (PHK) 300 of its employees in Indonesia.

2. Due to the potential of an extended period of low oil and gas prices, necessary measures are being taken to ensure ConocoPhillips can sustain its business and operations during this period, particularly in Indonesia.

ConocoPhillips is currently reviewing all of its activities to ensure that they are conducted in the most efficient way possible while maintaining our safety culture. Operation activities are reduced, optimizing all available resources. This will impact some projects: some still continue but many of them cancelled, put on hold, due to end soon or cease. These are in alignment with SKK Migas'€™ advice to review activities to mitigate the current prices.

3. In the case of the 17 workers in Anambas, they were not laid off (PHK), but their contracts (Perjanjian Kerja Waktu Tertentu) with one of ConocoPhillips Indonesia'€™s contractors had ended on April 30, 2015 and has not been extended. Based on a recent meeting on May 12, 2015 in Matak, Anambas, ConocoPhillips Indonesia has conveyed an alternative solution for those whose contract has ended: four of these workers have been offered to work under another contractor, as there is a match between the job requirement and the workers capabilities. Meanwhile, the rest will be offered in-kind support to set up their own small business.

4. Your report states that we have reduced our workforce from 500 to 230. This is incorrect. The workers impacted are of those from various contractors from our work areas in Anambas (Riau Island), Jakarta and South Sumatra, due to the end of the contract or the work has ceased. The nature of the Oil & Gas business is that projects start and manpower resources are added to perform the work necessary to complete the project. Later, at the end of the project, the contract ends and the workforce is released and becomes available for other company'€™s projects.

Diarmila (Mila) Sutedja

Corporate & External Communications Manager

ConocoPhillips Indonesia

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