Total to spend $1 billion in Indonesia this year
Total to spend $1 billion in Indonesia this year
Leony Aurora, The Jakarta Post/Jakarta
Oil and gas giant Total E&P Indonesia plans to spend US$1 billion
this year to boost production and make up for declining output
from other producers that supply PT Badak NGL in Bontang, one of
the nation's two liquefied natural gas (LNG) plants.
President director and general manager, Roland Festor, told
reporters on Thursday that the funds, about 10 percent higher
than the $900 million it spent last year, would be used to
establish nine new rigs and platforms.
"We are developing two new fields called Sisi (and) Nubi,"
said Festor at the sidelines of the four-day IndoGas conference,
referring to parts of the Mahakam oil block in East Kalimantan.
The new fields were expected to start producing in mid 2007,
he said.
"We'll compensate as much as possible the decline from the
other producers," said Festor.
Total and two other companies -- including Unocal -- are
supplying Badak NGL in Bontang, East Kalimantan.
Indonesia is in dire need of new gas fields as some of the
existing ones, which have been operating since the 1980s, are
seeing a decline in output.
State oil and gas firm PT Pertamina recently announced that it
had rescheduled the delivery of 51 shipments of LNG, representing
more than 2.75 million tons,G to its three main buyers of Japan,
South Korea and Taiwan.
Forty two of the loads were supposed to be provided by the
Bontang plant and had to be postponed due to problems in the
Attaka field, operated by Unocal. The company, however, said that
the damage caused by a fire in February last year had been
repaired and the decline was caused by the aging field.
Following the shipment rescheduling, Japan's third largest
energy producer Chubu Electric Power Co. has said that it might
not extend its contract with Indonesia, worrying that the country
would not be able to meet its commitments.
The government quickly reacted by saying that it would offer
lower prices to costumers that wished to continue buying LNG from
Indonesia.
Amid the shortfall from other producers, Total is seeing a
rise in gas output, beating historical records on Jan. 2 with
2.87 billion cubic feet (bcf) per day, equivalent to 631,000
barrels of oil in one day.
"Our production in 2004 is 2.4 billion bcf of gas on average
per day, which corresponds to 533,000 barrels per day, or 5
percent more than in 2003," said Festor.
"We expect to go to at least 2.5 bcf per day this year."
Festor said that the production was higher than the company's
commitment to Bontang and the excess would be used to compensate
other producers' fall in output. "But it will not be enough to
cover the decline in Attaka," he said.
Total's current operation sites cover an area of 2,000
hectares, with seven oil and gas fields, and 500 production wells
in remote areas of East Kalimantan, including Handil, Bekapai,
Peciko, Tambora and Tunu, supplying about 66 percent of Bontang's
gas requirements.