EMP to spend $195m to raise oil, gas output

EMP to spend $195m to raise oil, gas output

Jakarta/Bloomberg

PT Energi Mega Persada, Indonesia's second-largest listed oil
and gas company, plans to spend US$195 million this year to
develop three areas to increase output, the company's official
said.

Energi Mega will spend $104 million to develop the Kangean
area that it acquired from BP Plc. last year, Energi Mega's
President Director Christopher Newton said in an interview in
Jakarta today. It will spend $63 million on the Brantas area in
East Java and $28 million on the Malacca Strait block, he said.

"This year our output will increase with additional output
from Kangean," Newton said after a shareholder meeting. "We're
still observing new opportunities and when we find something
worth pursuing for, we'll add the funding."

Energi Mega has been offered incentives by the Indonesian
government to develop oil and gas fields as part of a drive to
boost production. Indonesia's oil output has fallen 5 percent
annually during the last five years to less than 1 million
barrels a day while demand has risen by more than 6 percent a
year during the period.

The company plans to pump 12,000 barrels a day of crude oil
from its Malacca Strait site, 3,450 barrels a day from Kangean,
and 1,400 barrels a day from Brantas, Corporate Secretary
Purwanto told reporters. Energi plans to produce 264 million
cubic feet of natural gas a day from its Kangean, Brantas and
Malacca Strait areas, he said.

The Indonesian government in April offered incentives to oil
companies, including a 120-percent reimbursement on development
costs. Energi Mega plans to develop three small oil fields to
take advantage of the incentives that are part of the
government's drive to boost oil output, Chief Commissioner
Suyitno Padmosukismo said.

Energi Mega spent $280 million last year, including $165
million to acquire the Kangean block, Padmosukismo said.

Shareholders approved the use of a $275-million loan facility
from Credit Suisse First Boston to refinance debt and develop the
Kangean gas area, Newton said.

Energi Mega's net income rose four-fold on higher prices to
Rp 74.2 billion, or Rp 8.98 a share last year, the company said
on April 28. The Jakarta-based company didn't meet its estimate
of Rp 189.5 billion in 2004, stated in its prospectus for public
listing in June last year.