Spending up yet oil exploration decline in RI

Spending up yet oil exploration decline in RI

JAKARTA (JP): The number of wells drilled for oil and gas exploration and production in Indonesia declined substantially last year in spite of a significant increase in spending commitments by petroleum companies operating in the archipelago.

The exploration and production director of the state oil company Pertamina, Priyambodo Mulyosudirjo, told reporters yesterday that the number of exploration wells drilled in 1994 dropped to 79, from 126 in 1993, and production wells dropped to 575, from 647.

Last year's drilling was well short of Pertamina's target, which was 126 new exploration wells and 634 new production wells.

Priyambodo did not explain the decline.

Last year, Pertamina awarded only four contracts to private companies for oil and gas exploration and production, as compared to 12 awarded in 1993, 11 in 1992 and 22 in 1992.

But Priyambodo was optimistic that the number of exploration and production wells drilled this year would increase to 128 and 586 respectively.

Of the 128 exploration wells envisaged, 11 will be drilled in the eastern provinces and the other 117 will be drilled in the western provinces, he said.

Responding to questions about the small scale of oil and gas exploration in the eastern region, Priyambodo said: "It is because the area holds high risks for investments. Contractors, therefore, prefer to invest in the western provinces."

He noted that Pertamina and its contractors had drilled six exploration wells in the eastern provinces last year, as compared to six wells in 1993 and eight wells in 1992.

Spending

The director said spending commitments for exploration activities were estimated to have increased to US$491.01 million last year, from $462.28 million in 1993.

But the executive did not mention the real spending of oil companies on exploration activities in 1994.

Oil discoveries increased to 22,185 barrels per day (bpd) last year from 18,408 bpd in 1993, while discoveries of natural gas fell to 341.92 million cubic feet from 644.83 million cubic feet in 1993.

According to Priyambodo, Pertamina is offering more oil and gas exploration and production contracts to private companies this year.

"We are now negotiating with nine companies regarding oil and gas exploration in new blocs, and with eight other firms regarding technical assistance in developing old oil fields," he said.

He expected that Pertamina would award four production-sharing contracts for exploration and production later this month. (fhp)