Chevron to make RI its Asian HQ

The Jakarta Post, Jakarta

U.S. Chevron Corp., the world's fifth-largest energy company, plans to make Indonesia the headquarters for its Asian operations, after its recent acquisition of a smaller rival turned the country into its largest operating ground.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Monday that Chevron conveyed its plan to expand its business in Jakarta and invest more in the oil, gas and geothermal sector to President Susilo Bambang Yudhoyono.

"Chevron is now the largest foreign energy company in Indonesia and Asia. By expanding its headquarters in Jakarta, we expect it to have an advantageous multiplier effect for the country," he said.

Purnomo made the remarks after accompanying Chevron chairman and chief executive officer Dave O'Reilly to meet Susilo.

Chevron's sweetened bid of US$17.1 billion was accepted by rival Unocal Corp., defeating a bigger offer of $18.5 billion from the China National Offshore Oil Corp. (CNOOC).

In the meeting, Purnomo said, Susilo requested Chevron to increase its oil production in Indonesia, especially in the old fields around central Sumatra which accounted for about 50 percent of the country's oil output.

"Chevron said it would try to maximize oil output from this region from a steep decline. We know this is an old oil field. They also pledged to seek other oil and gas blocks in other part of the country to maintain its production," he said.

Purnomo said Chevron also disclosed its plan to operate the East Kalimantan gas pipeline and requested the government to help develop infrastructure for supplying gas to the local market.

In the geothermal sector, the company would upgrade its power plants in West Java by constructing two more power plants from the current two. The combined plants would have a total capacity of about 210 megawatts, Purnomo added.

Headquartered in San Ramon, California, Chevron operates in approximately 180 countries, with a capital and exploratory budget of US$10 billion this year, up from $8.3 billion in 2004.

From its oil output of more than 2.5 million barrels per day (bpd) last year -- with two-thirds of the volume derived from outside the United States and in more than 20 different countries -- the firm recorded a revenue of $150.9 billion and a net profit of $13.3 billion.