Oil, gas exploration increases despite financial catastrophe

JAKARTA (JP): Oil and gas contractors intensified exploration last year in anticipation of a recovery in oil prices over the next few years, according to state oil and gas company Pertamina.

Pertamina said recently that in 1998 a total of 130 exploration wells were drilled across the country, a 48 percent increase on the 88 wells sunk in 1997.

However, the statement said that contractors made slight cuts in production development, drilling only 778 development wells, a 0.1 percent decrease on the 861 wells developed in 1997.

The total distance covered by seismic survey transects last year dropped by 20 percent to 313,000 kilometers from 393,000 kilometers in 1997.

Second dimension seismic surveys were conducted over 22,000 kilometers last year, as against 29,000 kilometers in 1997, while three dimension surveys were carried out over 291,000 kilometers in 1998, compared to 364,000 kilometers in 1997.

Despite a fall in the number of development wells drilled, expenditure on development wells rose to US$2.27 billion last year from $1.99 billion in 1997.

Contractors also invested a total of $755 million in drilling exploration wells, up from $664 in 1997.

A Pertamina official in charge of supervising foreign contractors said earlier that contractors planned to spend $5.3 billion on exploration and production in 1999, an increase of $1 billion on 1998.

The official, Gatot K. Wiroyudo, said that contractors planned to spend $912 million on exploration alone in 1999, up from $755 million last year.

"Despite a slump in oil prices, contractors plan to increase their budgets for exploration in anticipation of an increase in oil prices over the next four to five years," Gatot said.

A glut in supply resulting from global recession recently forced oil prices below $10 per barrel for the first time in two decades.

There are currently 162 production sharing contract areas in Indonesia operated by a total of 48 contractors. These areas account for 95 percent of the country's oil output, which is currently around 1.28 million barrels per day (bpd). (jsk)