Pertamina to spend $2.08b for 2004 operations next year

Evi Mariani, The Jakarta Post, Jakarta

State-owned oil and gas company Pertamina plans to spend about US$2.08 billion for its operations in 2004, allocating $1.4 billion for upstream and $680 million for downstream activities.

"For the downstream operations, Pertamina will maintain and revamp its refineries, improve its distribution network, buy tankers, build oil fuel depots, establish liquefied petroleum gas (LPG) terminals and upgrade oil fuel terminals," said company president Baihaki Hakim.

For the upstream operations, the budget would be used for the development of its production wells, especially those in southern Sumatra and western Java. It would also be used for the development of geothermal fields and participation in joint venture blocks, he said on Tuesday in a hearing with the House of Representatives Commission VIII for the mining, oil and gas industry.

The company sees that its crude oil production capacity is likely to increase from 34,463,750 barrels in 2002 to 36,950,000 barrels in 2004.

However, even though the company sees a bright outlook in the crude oil production capacity, the nationwide capacity is most likely to continue decreasing because the country has not discovered new productive oil fields in the last four years.

"The last time Indonesia found a productive oil field was about four years ago," he said. "It seems we have run out of new oil fields."

According to a report from the Ministry of Energy and Mineral Resources, Indonesia's production of oil (comprising crude oil and condensate) steadily declined from 1.6 million barrels per day (bpd) in 1995 to 1.34 million bpd in 2001.

"Even to produce 1.2 million bpd at present, the country has to make real efforts," Baihaki said.

According to him, Pertamina contributes less than 10 percent to the national crude oil production. The remainder is contributed by production-sharing contractors including Caltex, Unocal and Exxon-Mobil.