Caltex to increase oil output by 25,000 bpd

Caltex to increase oil output by 25,000 bpd

JAKARTA (JP): The country's largest oil producer PT Caltex
Pacific Indonesia planned to increase its crude oil output by at
least 25,000 barrels per day (bpd) to 795,000 bpd next year,
company president Baihaki H. Hakim said yesterday.

Baihaki said the output increase would be made through the
application of more advanced enhanced oil recovery technology in
its 10 largest oil fields, including Duri and Minas.

"Caltex is known to be the leader in this technology," Baihaki
said on the sidelines of the ceremony to sign the production
sharing contracts and technical operation contracts between the
state-owned oil and gas company Pertamina and eight new
investors.

Caltex, which is jointly owned by the giant United States oil
companies Chevron Corp. and Texaco Inc., currently produces crude
oil from four blocks in Riau -- the Pakanbaru Coastal Plains,
Rokan, Mount Front Kuantan and Siak.

The company accounts for 45 percent of the country's total oil
output with a production capacity of 770,100 bpd.

Baihaki said the company's program to increase its output
complements the country's plan to meet the new oil output quota
allocated by the Organization of Petroleum Exporting Countries
(OPEC).

OPEC in its recent ministerial conference in Jakarta increased
all of its member countries' output quotas, allowing Indonesia's
oil supply to rise by 9.5 percent to 1.456 million bpd for the
first half of next year.

"As a matter of fact, we had planned to increase our output
before OPEC decided on the quota increase," Baihaki said.

Retail

Baihaki added that Caltex was currently undertaking a large-
scale promotion of the company's new five-pointed-star logo which
was introduced three years ago.

Thousands of billboards carrying the logo have been erected at
strategic locations throughout the country, raising speculation
over whether Caltex is planning to expand beyond the oil
business.

Baihaki admitted the large-scale logo promotion was intended
to create brand-name awareness among the public as part of the
company's preparation to enter the retail business in oil
products.

He said the company had started making such preparations after
the government signaled that it would open the downstream sector
of the oil industry to private businesses in the near future,
which has thus far been monopolized by Pertamina.

Indonesia and other members of the Association of Southeast
Asian Nations (ASEAN) has agreed to open the downstream industry
for oil products to the private sector by 2003 as part of the
implementation of the ASEAN free trade area.

"In the future, you will see shopping centers near gas
stations where we'll also sell our products," Baihaki said. He
clarified, however, that Caltex would not enter any other sector
so that it could focus on oil products.

Baihaki said Caltex was not interested in developing private
refineries in Indonesia since it currently operated several
refineries in Thailand and Singapore.

"There is currently overproduction in the Southeast Asian
region," Baihaki said. (jsk)