Caltex in talks for exploration rights
Caltex in talks for exploration rights
SINGAPORE (Dow Jones): PT Caltex Pacific Indonesia is negotiating with state-owned Pertamina for additional exploration and production acreage in Indonesia, Caltex Pacific Managing Director Bob Galbraith said late Thursday.
It is still evaluating blocks offered under Indonesia's current exploration tender, he said, adding that the blocks for which it is in talks aren't included in the tender.
New blocks may allow Caltex Pacific - which primarily operates mature fields in Riau Province on the island of Sumatra - to boost production from current levels of 670,000 barrels a day.
The company is losing an average 40,000 barrels a day of crude output, due to field decline and ongoing roadblocks at its Riau operations, Galbraith said. Its production averaged 705,000 b/d in 2000.
Local residents seeking jobs and land compensation have periodically blocked roads leading to Caltex Pacific's operations since last year. The most recent blockade began Monday.
The company has invested "a few million" dollars to drill additional wells in its Coastal Plains Pekanbaru contract area, which will allow it to produce an additional 5,000-6,000 b/d over the next several months, Galbraith said.
The additional production will partially offset field depletion in the block, which peaked at 70,000 b/d a few years ago. "We will be fairly happy if we can keep output above 50,000 b/d" in the CPP block, Galbraith said.
Caltex Pacific's contract to operate the CPP block expires in August this year. Its contract hasn't been renewed, and the block has become the object of a tug of war between Pertamina and the Riau provincial government.
They are fighting over a diminishing asset, as uncertainty over the contract's future led Caltex to cut back on investment in the block.
"We stopped any investment that wouldn't pay out during the term of the contract," Galbraith said.
Caltex Pacific Indonesia is a joint venture between Chevron Corp. and Texaco Inc. The two companies announced last year plans to merge.
Caltex Pacific Indonesia accounts for about half of Indonesia's crude production.