Tue, 10 Oct 2000

Unocal invests US$1.5 billion over five years

JAKARTA (JP): American oil and gas company Unocal Corporation said it, together with its partners, had allocated a US$1.5 billion investment to develop the country's oil, gas and geothermal resources during the 1997 to 2002 period.

The size of the investment underlined Unocal's commitment to Indonesia and made it "one of the top investors in the country during a very difficult period," Unocal Indonesia's public relations coordinator Erwin Lebe said in a statement on Saturday.

He said chairman of the board and chief executive officer (CEO) Roger C. Beach, accompanied by, among others, the president of Unocal Indonesia Brian W. G. Marcotte, paid a courtesy call on President Abdurrahman Wahid on Friday to voice the company's commitment to Indonesia.

The President was accompanied by Minister of Energy and Mineral Resources Purnomo Yusgiantoro and the president of state oil and gas company Pertamina during the meeting.

Unocal is locally known for its pioneering work in deepwater oil and gas exploration.

According to Lebe, Beach explained to the President during the meeting that Unocal had started exploration work in the deepwater Makassar Straits area off the East Kalimantan coast in 1996.

Thus far, the company had drilled 83 deepwater wells in the Makassar Straits and had made nine new discoveries including the Merah Besar and West Seno oil and gas fields.

As the operator, Unocal planned to develop the West Seno field for a total outlay of approximately $700 million, which would be spent on the construction of facilities, including wells and pipelines.

"West Seno is expected to start up at the end of 2002 and to produce oil at a rate of 60,000 barrels per day," Beach was quoted by Lebe as telling the President.

He also said Unocal had discovered large gas reserves in several structures in the Makassar Straits.

The gas reserves, which are estimated at between four and 10 trillion cubic feet (tcf), would be supplied to feed the planned Train I or the ninth train of the liquefied natural gas (LNG) plant in the Badak area of Bontang, East Kalimantan.

The Badak LNG plant, which is the country's largest LNG complex, thus far has eight LNG trains with an annual output capacity of approximately 21 million tons.

Aside from Unocal, the LNG plant receives gas supplies from Total Indonesie, a subsidiary of French oil and gas company TotalFina, and from American oil and gas firm Vico.

Unocal said that it expected Train I to start up in mid-2005.

Beach also said that Unocal was interested in the country's geothermal resources as an alternative for power generation and had developed a 330-Megawatt (MW) geothermal plant at Salak mountain in West Java together with Pertamina and state electricity company PT PLN.

"Unocal encourages the use and development of this resource that is a unique feature of Indonesia among the countries of the world," he said.

Analysts say Indonesia has huge geothermal resources which could potentially produce 19,000 MW but thus far only a fraction of the resources have been developed.

According to Lebe, during the meeting Beach also called on the government to provide security for the country's oil and gas industry so as to improve confidence among foreign investors. (jsk)