Jakarta (ANTARA News) - Indonesia's state oil and gas firm, Pertamina, aims to lift investment by 50 percent to 21 trillion rupiah ($2.2 billion) this year to boost crude output and upgrade refineries, its president said on Thursday.
Indonesia is Asia Pacific's only member of OPEC, but ageing fields and lack of investment has made the country a net crude oil importer since 2006, although it is still a net energy exporter, thanks to a huge supply of natural gas and coal.
The country is also Asia's largest importer of gasoline and gas oil as its own refineries are only able to meet about two thirds of demand.
"Some of the investment in 2008 will be financed from loans and the rest from the internal resources of Pertamina," Pertamina President Director Ari Soemarno was quoted by Reuters as telling reporters.
He said that the spending would be split between 13 trillion rupiah on upstream activities and 8 trillion for downstream.
Last year, Pertamina's investment was estimated at 14 trillion rupiah, including 10 trillion rupiah on upstream.
Suroso Atmomartoyo, Pertamina's processing director, said around $300 million would be spent to upgrade its Balongan refinery, which has a capacity of 125,000 barrels per day.
The refinery supplies oil products to densely populated West Java province, including the capital Jakarta.
Soemarno said Pertamina was also considering raising funds via bond issues this year to finance some projects, although he did not elaborate.
The company had said it planned to spend 4 trillion rupiah this year to develop the Cepu block, which it operates jointly with ExxonMobil Corp.
Indonesia hopes that the giant onshore Cepu block, located between Central and East Java provinces, will provide a big boost for the country's flagging oil and gas output.
Pertamina plans to boost its overall oil production by 16.4 percent to 170,000 barrels per day in 2008 as the government tries to limit the impact of high oil prices on its budget. The firm imports some crude oil from abroad to feed its
refineries to compensate falling domestic output.
Soemarno declined to comment directly on dollar buying by Pertamina for its oil imports in recent days, seen as a key factor affecting the rupiah currency exchange rate.
But he said that the firm may buy between $30 million to $40 million a day if oil prices were between $60-$70 per barrel.
He said the firm would need $60 million to $70 million daily for oil imports if oil prices hit $100 per barrel.
"We always coordinate with Bank Indonesia when we are looking for dollars," Soemarno said.
Oil was trading above $90 a barrel on Thursday, taking a breather from losses of more than $3 in the past two days as a hefty build in U.S. crude stocks compounded concerns of a slowing U.S. economy.
Indonesia produced 837,600 bpd of crude oil in December, up from 823,000 bpd in November. The country also produced 125,700 bpd of condensate last
month, compared with 126,400 bpd in November. (*)