Oil companies to spend $6.3b on exploration and production
Oil companies to spend $6.3b on exploration and production
JAKARTA (JP): Oil and gas contractors will raise their
exploration and production budgets 40 percent to US$6.3 billion
this year, state-owned oil and gas company Pertamina said
yesterday.
Pertamina exploration and production director Priyambodo
Mulyosudirdjo said the considerable rise in expenditures
indicated that the country was still an attractive investment for
oil and gas contractors.
"Oil and gas contractors say Indonesia remains very attractive
for long-term investment to them despite the current economic
crisis, which they believe is only temporary in nature,"
Priyambodo said at a media conference on the outlook of the
country's oil and gas industry.
Officials who attended the conference included the head of
Pertamina's foreign oil contractors directorate, Gatot Karyoso,
and company spokesman Ramli Djaafar.
Priyambodo believed the oil and gas contractors would spend
more than their $6.3 billion planned budget this year since their
expenditures exceeded planned budgets in previous years.
"In 1997, the contractors' actual expenditures for oil and gas
exploration and production stood at $4.5 billion, compared with
the proposed budget of $3.9 billion," Priyambodo said.
Priyambodo said the country's output could continue to
maintain the 1997 crude oil and condensate production level of
1.58 million barrels per day, including 1.456 million barrels of
oil per day.
Indonesia has been awarded a crude oil production quota of
1.456 million barrels per day by the Organization of Petroleum
Exporting Countries (OPEC).
Gatot said contractors had allocated $1.5 billion for oil and
gas exploration, up from $900 million last year.
"This will be the largest exploration budget ever over the
past 30 years," Gatot said, adding that the number of exploration
wells would rise to 206 this year, up from 103 last year.
Gatot said contractors had been earlier committed to spend an
average of $4 billion per year for oil and gas exploration and
production until 2000.
He said if crude oil prices remained between $17 and $18 per
barrel, such an investment would generate between $14.5 billion
and $15 billion in yearly revenues, between 62 percent and 64
percent -- or between $9.2 billion and $.9.5 billion -- of which
would go to the government in royalties and fees.
Priyambodo said the government had awarded 29 oil and gas
contracts to local and foreign investors last year -- which was a
30-year record -- and was expected to sign dozens of contracts
this year.
"Investors are attracted to the fact that the success ratio in
finding oil and gas in the country is quite high," he said,
adding that of the 102 exploratory wells drilled last year, 49
wells contained oil or gas.
He said Pertamina had recently concluded negotiations for
seven areas: Sareba, in and offshore from Irian Jaya;
Simenggaris, offshore from East Kalimantan; Pasiriaman in South
Sumatra; Kapoposang, offshore from Sulawesi; Ganal, offshore from
East Kalimantan; Bukat, offshore from East Kalimantan; and South
Sokang, offshore from East Natuna.
"We'll sign the contracts soon since most of have been
approved by the President (Soeharto)," Priyambodo said.
Pertamina is negotiating with contractors over eight contract
areas, including four in Irian Jaya, and will soon negotiate over
another four contract areas.
Priyambodo said Pertamina was offering eight areas, including
two off of South Sulawesi and one off of and in Irian Jaya, for
direct negotiations for production sharing contractors this year.
Nine other areas, including four offshore from Irian Jaya, are
open for tender, he added. (jsk)