Caltex sees lowered RI crude output

Caltex sees lowered RI crude output

SINGAPORE (Dow Jones): PT Caltex Pacific Indonesia expects lowered average crude production in 2001, as local protests continue to erode its daily output, Caltex Pacific Managing Director Bob Galbraith said Thursday.

Caltex Pacific is producing 660,000 barrels a day of crude from its Sumatra fields, down from an average daily output of 705,000 b/d in 2000. The company, joint venture of Chevron Corp. and Texaco Inc., had originally targeted an average production of 740,000 b/d for 2000.

"We'd be overjoyed if we could reach last year's average," Galbraith said, adding that the company is instead "expecting additional declines."

Caltex Pacific accounts for the lion's share of Indonesia's daily crude output, which Dow Jones estimates at 1.27 million b/d in December. Under production target cuts announced by the Organization of Petroleum Exporting Countries Wednesday, Indonesia's target output will be 1.307 million b/d from Feb. 1.

Villagers' blockades in Bekasap, part of the Duri production area, hamper access to rigs and equipment that together account for about 50,000 b/d. Caltex Pacific shut in three rigs Wednesday, cutting off 3,000 b/d, and may have to shut five more.

The villagers are seeking land compensation and employment. Caltex Pacific and its contractors employ about 26,000 people, but unemployment is high in Riau Province, the site of the majority of the company's operations.

Social unrest in Indonesia discourages much-needed foreign investment, Galbraith said. He estimated fallen production from Caltex Pacific alone cost Indonesia US$300 million in lost oil revenues in 2000.

"There is no quick fix" to the unemployment that leads the villagers to disrupt production, he said.