Pertamina predicts drop in crude oil output next year<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina and its
\nforeign oil and gas production-sharing partners have forecast a
\ndrop in Indonesia's crude oil production to 463.2 million barrels
\n(mmbo) next year from this year's output of 515.6 million
\nbarrels.<\/p>\n
In its year-end report, Pertamina's foreign contractors'
\nmanagement body (BPPKA) said on Thursday that oil production
\ndeclined from 542.1 mmbo in 1998 to 519.9 mmbo in 1999, and 515.6
\nmmbo this year.<\/p>\n
\"The projection for 2001's oil production of 463.2 mmbo or 90
\npercent of this year's realized output, is because production
\nfrom new wells has not come on stream yet so as to make up for
\nthe natural decline in oil production,\" BPPKA said in its report.<\/p>\n
But the head of BPPKA, Herucokro, added that Pertamina's
\npartners had the potential to pump up to 483 mmbo of oil next
\nyear, slightly higher than they had projected.<\/p>\n
\"The budget of 463.2 mmbo is based on the projections of our
\npartners, but we see that there is potential to further raise
\nit,\" Herucokro explained.<\/p>\n
According to him, Pertamina's own estimate of 483 mmbo had in
\nfact already been factored into the 2001 state budget.<\/p>\n
He added that Pertamina's partners would revise their
\nprojections.<\/p>\n
Another sharp difference is the estimated oil price for next
\nyear, with Pertamina's partners pegging the oil price at $21.98
\nper barrel, as against the government's projection of $24 a
\nbarrel in its state budget.<\/p>\n
BPPKA in its report further estimated that Indonesia's oil
\noutput would gradually decline to 460 mmbo by the year 2005.<\/p>\n
Pertamina also estimated that gas output would decline next
\nyear to 2.2 trillion cubic feet (tcf) from this year's 2.4 tcf.<\/p>\n
However, BPPKA gave assurances that the slight decline in gas
\nproduction would not affect Indonesia's commitment to buyers of
\nits gas or liquefied natural gas (LNG).<\/p>\n
BPPKA also said that the drilling of exploratory wells dropped
\nsharply from its target. Of the budgeted 136 projects, only 63
\nprojects had been brought to fruition this year.<\/p>\n
It said that conflicts with locals in designated prospecting
\nareas had hampered the efforts of many oil companies in finding
\nnew reserves.<\/p>\n
BPPKA said that foreign oil and gas companies planned to spend
\nup to US$5.28 billion next year on exploration and production, a
\n$785 million increase over the current year.<\/p>\n
Most of the expenditure would be on production activities,
\nwhich would amount to $2.87 billion. For this year, realized
\nproduction expenditure is estimated at $3.01 billion.<\/p>\n
But the budget for exploration activities of $752 million
\nwould exceed this year's realized exploration spending by $164
\nmillion.<\/p>\n
Herucokro said that the fresh investment would largely be
\nconnected with Indonesia's first deepwater project in the West
\nSeno oil and gas field located in offshore East Kalimantan.<\/p>\n
The field, jointly operated by Unocal Corp. and Mobil Corp.,
\nis estimated to contain about 150 million barrels of recoverable
\noil and gas reserves.<\/p>\n
Throughout the development of the project, Herucokro went on,
\nthe consortium would spend some $600 million on the construction
\nof the platform and equipment.<\/p>\n
He said that the consortium would conclude a tender early next
\nyear for the development of the platform, and the project was
\nexpected to be up and running by 2002.<\/p>\n
Other investments, he said, were for the construction of gas
\npipelines and other facilities associated with the new gas supply
\ncontracts with Singapore and Malaysia.<\/p>\n
Pertamina has said that it would soon sign a gas sales
\ncontract with the Singaporean gas firm Gas Supply Pte Ltd for the
\nsupply of gas from Sumatra to Singapore.<\/p>\n
As for Malaysia, he said, Pertamina was expecting to sign a
\ncontract with its Malaysian counterpart Petronas in April next
\nyear.<\/p>\n
Herucokro added that he expected Pertamina could start
\nsupplying Malaysia with gas from the West Natuna fields, which
\nare located in the South China Sea, by 2003. (bkm)<\/p>",
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