Energy Ventures wants to set up base in Batam

Energy Ventures wants to set up base in Batam

SINGAPORE (Reuters): Energy Ventures Inc (EVI), U.S.-based
manufacturer of oil field products, is seeking to establish a
world class production site on Indonesia's Batam island, a senior
EVI official said on Thursday.

"We are going to develop a manufacturing presence in Batam for
completion tools and offshore equipment. I can assure you
developments in Batam are going to be very significant," Bernard
Duroc-Danner told Reuters in an interview.

"This is a global market, we look for such locations all the
time. This one (Batam) has been selected as a particularly
excellent one."

EVI earlier signed a strategic alliance with Indonesian oil
and gas pipeline manufacturer P T Citra Tubindo that will give
the company a stake in a drilling tools plant jointly with Citra
in Batam which is about 20 km off Singapore.

"We are taking ownership in a plant and providing technology
to make a line of drilling tools. We are also going to have a
marketing venture," Duroc-Donner said.

EVI is looking to invest "well in excess of US$10-20 million"
over the next five to 10 years to turn its manufacturing base in
Batam into a formidable force that will raise its share of the
Asian market substantially.

Currently, between five and 10 percent of EVI's revenue comes
from Asia and Duroc-Donner hopes to raise this to 20-25 percent
once its investments in Batam are completed.

Its current revenue share from Asia, he said, is "completely
out of synch with the importance of the market."

Duroc-Donner said group revenue in 1997 is expected to reach
around US$850 million compared to US$478 million in 1996.

"Wall Street expects revenues to be circa $1.3-1.4 billion in
1998, which is not unreasonable," he said.

EVI has a drilling tools plant in Singapore which contributes
around US$10-15 million to group revenue but the plant will not
be expanded as the focus of its manufacturing site is now on
Batam, Duroc-Donner said.

The company has around 50 manufacturing plants and almost all
of them are located in North and South America.

On the financial and monetary crisis sweeping Southeast Asia,
Duroc-Donner, who has faced similar turmoils in South America and
Mexico where the company has a big exposure, said that the impact
on oil and gas exploration would be minimal.

"In spite of all these things, hydrocarbon demand has
continued to grow. We would have had a higher growth but now this
will put a dent in the demand," he said.

Duroc-Donner said that the company was also attracted to the
region by the tremendous oil and gas exploration works that are
taking place, especially the multi-billion dollar Natuna gas
field developments.

Natuna is the biggest gas field development in Asia with 222
trillion cubic feet of general reserves of which 46 trillion are
commercially recoverable.

The first gas is expected to be recovered in 2003 with
investments running into over US$40 billion for the entire
project.