Oil, gas firms to increase investment next year
Oil, gas firms to increase investment next year
The Jakarta Post, Jakarta
Two oil and gas firms plan to make new investments next year in
what seems to be a positive development in the country's oil and
gas sector, which has seen output declining due to a lack of
investment.
PT Caltex Pacific Indonesia (CPI), the local unit of U.S.-
based oil and gas giant ChevronTexaco Corp., said on Wednesday it
planned to spend as much as US$300 million next year to develop
new oil fields in the country.
CPI president director Wahyudin Yudiana Ardiwinata was quoted
by Bloomberg as saying that most of the money would go to develop
the Rokan and Siak onshore blocks in Riau province and to
increase light oil output from the Bekasap field.
It has also submitted a proposal to state oil and gas firm PT
Pertamina to team up in developing the latter firm's oil fields
in South Sumatra and East Java.
CPI is the top oil producer in Indonesia, which operates in
four areas around Sumatra island under production-sharing
contracts with oil and gas upstream regulator BP Migas. The
company produces about 510,000 barrels of crude oil per day,
lower than 770,000 per day in 1998.
Meanwhile, Bloomberg also reported that Santos Ltd.,
Australia's largest natural gas producer, planned to double
spending in this country to about $100 million next year as it
starts developing two projects.
The news agency quoted the president of Santos' local unit,
Chris Newton as saying that the company would start developing
the Maleo gas field and Oyong oil and gas project off East Java
next year.
Santos announced in August that it had delayed the startup of
the Maleo project to 2006 from 2005. The company owns 75 percent
of the Madura concession area, where Maleo is located, while
Canada's Talisman Energy Inc. owns the remainder.
The company's plan to develop the $130 million Oyong project
was approved by the Indonesian government, Cue Energy Resources
Ltd., a partner in the project, said in September.
Oyong will start producing gas in the first quarter of 2006
and may start pumping oil earlier than that to take advantage of
high crude-oil prices. Santos owns 45 percent of the project,
Singapore Petroleum Co. owns 40 percent and Cue 15 percent.
Indonesia has seen its oil declining by an average of 5
percent a year over the last five years, according to Bloomberg.
The fall has been blamed on aging oil fields and a lack of new
investment as investors have worried about various uncertainties
including unfavorable government regulations, security threats
and labor conflicts.
According to data from the Ministry of Energy and Mineral
Resources, Indonesia's crude oil output declined by 0.5 percent
in October to about 962,000 barrels per day (bpd) from 966,465
bpd in the previous month.
Indonesia's production of condensate, a light oil produced in
association with natural gas, rose to 127,000 bpd from 118,445
bpd in September.
The lower oil output as made Indonesia, with the second lowest
output among members of the Organization of Petroleum Exporting
Countries (OPEC), a net oil importer since the beginning of the
year, thus causing the country to miss out the current oil price
bonanza.
Some observers have suggested that the government must make a
decision to quit OPEC because of the declining output.
Former Pertamina president Baihaki Hakim was quoted in the
press earlier as saying that as long as the country could not
attract new investment to boost its oil output, its status as an
OPEC member, which also means paying annual membership fees, was
no longer worthwhile.