Total to spend $1.5b in 2006 on gas production

Leony Aurora, The Jakarta Post, Jakarta

French oil and gas producer Total SA plans to spend US$1.5 billion next year, 66 percent more than the amount it has spent this year, to develop its fields and produce natural gas in Indonesia to maintain its production level and meet commitments.

The company will focus its development on the Sisi and Nubi fields in offshore Kalimantan, Ananda Idris, a spokesman for Total's Indonesian unit, said on Tuesday.

"We expect Sisi and Nubi to start producing gas in 2007, targeting some 500 million standard cubic feet per day (mmscfd)," said Ananda.

Output at the fields will help the company maintain its supply to PT Badak NGL's liquefied natural gas (LNG) plant in Bontang, East Kalimantan, he said.

Total produces some 2.5 billion cubic feet (bcf) per day at present, lower than its daily peak production of 2.7 bcf. Next year's target is to continue production at 2.5 bcf per day, said Ananda.

The Bontang plant relies heavily on Total, which supplies most of its gas needs. Output from aging fields operated by Chevron Corp. and Vico Indonesia is falling, leaving Total the main supporter of the plant.

Total will also use the capital to drill in several other fields, namely Peciko phase V and Tunu phase 10, in Kalimantan, said Ananda.

President Susilo Bambang Yudhoyono is slated to launch the production of Total's Peciko phase IV field, which is expected to produce 1.25 bcf per day, in Jambi on Friday.

Falling output from fields in gas-rich Kalimantan has forced the Upstream Oil and Gas Regulatory Agency (BP Migas) to negotiate with its Asian buyers to accept fewer shipments.

Buyers in South Korea, Taiwan and Japan have agreed to a supply cut from the Bontang plant by 30 cargoes -- equivalent to 1.8 million metric tons of LNG -- from the ordered 370 shipments next year.

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 in East Kalimantan, including Handil, Bekapai, Peciko, Tambora and Tunu.