Balikpapan, a small town located in East Kalimantan, became an oil town due to the huge and relentless efforts of the Dutchman Sir Jacobus Hubertus Menten.
Balikpapan was just a small outpost of Kutai sultanate in 1800s. It eventually became the greatest oil town in Indonesia and a well-known oil town in the world.
Here is the story of how the small dot along the shore of East Kalimantan became the most famous oil town in Indonesia today.
The story began in August 1860 when Jacobus Hubertus Menten, a mining engineer from The Netherlands was dispatched by the mining department of the Netherlands to East Kalimantan to explore for coals.
The mission was successful as Jacobus Menten discovered high-quality coals in the Mahakam delta area.
Due to the coal discovery and his good relationship with the Sultan of Kutai, Jacobus Menten was subsequently appointed by the government of the Netherlands as the manager of the coal mining company in 1862.
After several job assignments in Bangka and Bogor, Jacobus resigned from the mining department in 1882.
In December 1882, Menten received a coal mining concession from the Sultan of Kutai. In 1888, he handed over the concession to SMOB – Steenkolen Maatschappij Oost Borneo.
While searching for coals, Jacobus noticed oil seepages and realized the prospect of finding oil in East Kalimantan. After sharing this information with Sultan Aji Sulaiman, the sultan gave Jacobus an oil concession on 29 August 1888.
This concession to explore and produce oil covered the entire area of Kutai. Menten named the concession Louise after the name of his daughter. The Netherlands later recognized the Louise concession on 30 June 1891.
Menten could not do much with the oil concession as he could not get funding from investors in the Netherlands and Europe. Fortunately, the Sultan of Kutai extended the concession till 1897.
His luck came in September 1895 when Jacobus Menten met with Sir Marcus Samuel of Shell Transport and Trading Ltd, a company based in London. Sir Marcus Samuel agreed to finance the oil exploration in East Kalimantan.
On his return to Borneo, Menten met with Adrian Stoop of Steenkolen Maatschappij Oost Borneo, who also had applied to explore for oil in Louise concession. This meant SMOB would be a competitor of Jacobus in the quest to find oil in the Kutai area.
In 1896, Sir Marcus Samuel of Shell Transport and Trading Ltd and Jacobus Menten formed and registered a new company, NIIHM – Nederlandsch Indische Industrie en Handel Maatchappij – with the government of Dutch Indie. This joint venture sow the seed of the formation of Royal Dutch Shell.
Menten was ready to explore oil in the Louise concession with the new company and capital. Menten began the drilling for oil in the swamps of Delta Mahakam at the Sanga Sanga River. The drilling was extremely challenging as the area was swampy and they had to deal with wild animals such as boars, orangutans, and leeches. Many workers from Europe and Java suffered from illness and lost their lives.
Despite the difficulties, Menten eventually succeeded in striking oil 150 feet deep in Sanga Sanga on 5 February 1897. This marked the first oil discovery in East Kalimantan.
To refine the newly found crude oil, Menten identified Tandjung Toekoeng located at the bay of Balikpapan for building a refinery and a seaport for exporting the refined products. This is the location of the oil refinery and seaport in Balikpapan today.
Although the well in Sanga Sanga was more productive than the one in Balikpapan, Jacobus chose to build the refinery in Balikpapan as the location was ideal for constructing the refinery and the seaport. Also, the company found a water reservoir beneath Balikpapan.
At the same time, Menten spotted an oil seepage at Tandjung Toekoeng in Balikpapan and he managed to get a second oil concession which he called Mathilde, named after his wife, Mathilde van de Wal.
Jacobus Menten drilled the first exploration well in the Mathilde concession at Gunung Komendur. The drilling was successful. The Mathilda B-1 well had a decent flow from a depth of 180 meters on 15 April 1898.
With this discovery, Menten, after a long quest for oil, now had found a second source of oil and the location to build a refinery and a seaport for oil export.
1898 was a busy year for Balikpapan as Menten brought in oil workers, materials, and drilling equipment.
On 20 August 1898, A Shell oil tanker carried the first load of crude oil from East Kalimantan to Singapore. Subsequently, the oil tanker Broadmain shipped the crude oil directly to London.
This also marked the first oil trading in Asia. This was all due to the tremendous efforts of Menten and Samuel of Shell.
Although the oil production from the Mathilde concession around Balikpapan was not as significant as the Louise concession in Sanga Sanga, Balikpapan with its refinery was recognized as the oil town and the gateway to all the oil districts in East Kalimantan.
And this was how Balikpapan became an oil town in Indonesia.
However, Balikpapan boomed and became a truly significant oil town when several international oil companies, such as Total, Unocal, and Roy Huffington, came to town in the late 1960s. They discovered many giant oil and gas fields in East Kalimantan.
Although these huge oil and gas fields are quite depleted by now, Balikpapan continues to grow as it is the gateway to the new capital city of Indonesia, Ibu Kota Nusantara (IKN).
This article is adapted by Jamin Djuang from an article written by Handry Jonathan.
