Three oil firms invest $1.6b this year

Three oil firms invest $1.6b this year

Moch. N. Kurniawan, The Jakarta Post, Jakarta

Three oil and gas companies -- ChevronTexaco Corporation of
the United States, TotalFinaElf of France and Gulf Indonesia
Resources of Canada -- have planned a combined investment worth
US$1.6 billion this year to develop the country's oil and gas
resources.

ChevronTexaco's vice chairman Peter J. Robertson said the
company was ready to invest $450 million through its Indonesian
subsidiary PT Caltex Pacific Indonesia (CPI) and other
affiliates.

"We've been here for many years, 50 years ... we've had some
good times and some bad times.

"So we'll keep investing in the country and producing more oil
for many years in the future," he told the Jakarta Post on the
sidelines of the 28th annual Indonesian Petroleum Association
(IPA) convention.

He said that $225 million of the $450 million investment would
be spent to develop its Area 10 and 11 fields in North Duri,
Riau, and another $120 million to develop its offshore gas field
in the West Natuna area of the South China Sea.

Robertson didn't specify where the remaining $105 million
would be spent.

In addition to the amount, he said, ChevronTexaco expected to
spend at least $450 million more in the country in the coming
years to capitalize on opportunities that may emerge following
the liberalization of the country's oil and gas sector.

ChevronTexaco, which has thus far been involved in the
upstream sector, would expand into the downstream sector.

But, he noted, to date, the company had no intention to build
oil refineries in the country, citing the current excess
capacities of oil refineries in South East Asia. In the region,
the company has a refinery operation in Singapore.

CPI is the country's largest oil producer with a total
production of about 645,000 barrels per day (bpd), all from Riau.

The government implemented the new oil and gas law last
November, aimed at liberalizing the country's oil and gas
industry, scrapping state oil and gas company Pertamina's
monopoly both in the upstream and downstream sector.

Following the law, the country's fuel market, which has been
controlled by Pertamina, will be open for foreign firms.

Meanwhile, Ananda Idris, spokesman for TotalFinaElf E&P
Indonesie said the company would invest about $1 billion this
year mainly to raise its gas output to 2.4 billion standard cubic
feet per day (bcfd) from about 2.1 bcfd.

"We're going to develop our fields including building new
platforms and buy new equipment to meet the target," he told the
Post.

He added the company's target was part of its commitment to
supply more gas to the Badak liquefied natural gas (LNG) plant to
boost the plant's LNG exports.

TotalFinaElf also expected to spend another $1 billion next
year in expansion activities, Ananda said, but he did not
elaborate.

Currently, TotalFinaElf, the largest gas producer in the
country, operates several oil and gas fields in the Mahakam river
area, in East Kalimantan.

TotalFina also produces about 25,000 bpd of oil.

Separately, Gulf's spokesman Syahman Ginting said the company
was investing $112 million this year to double its gas production
to 600 mmscfd.

"We're now developing the Suban gas field in Sumatra and we
expect to complete the project in November this year," he told
the Post.

He added the company would deliver its gas to fulfill the
demand from CPI and Singaporean energy company SembCorp.

Gulf currently operates several oil and gas fields in Jambi,
Sumatra. Its oil production stands at about 70,000 bpd.