Unocal to develop RI's first deepwater oil and gas field

JAKARTA (JP): Unocal Indonesia Co, a unit of Unocal Corp, plans to develop the country's first deepwater oil and gas discovery off the coast of East Kalimantan by 2001.

Company president Timothy C. Lauer said on Friday that the company would cooperate with state oil and gas company Pertamina to develop the technology for the development of the deepwater deposit.

"We are now in the process of trying to put together a team with individuals from Pertamina to develop the deepwater technology," Lauer said on the sideline of a gathering to mark the delivery of emergency medical supplies to Indonesians by U.S. companies.

Unocal contributed US$25,000 to the $1.7 million relief program, which includes medical help for poor families severely affected by the monetary crisis.

The company announced last year it had discovered significant amounts of oil and gas in the Merah Besar field and made a similar statement two months ago regarding the Seno field. Both are located in the Kutai basin, in deep water in the Makassar Strait.

The Seno field is located in the Makassar Straits production sharing contract (PSC) area, which is operated and 50 percent owned by Unocal, with Mobil Makassar Inc, a unit of Mobil Corp, holding the remainder.

The Merah Besar field is located partly on the Makassar Straits PSC area and partly in the East Kalimantan PSC area which is operated and wholly owned by Unocal.

Lauer said the company had already drilled several wells but had still to drill several others these year to ascertain the full amount of gas and oil in those fields.

Earlier the company estimated the Seno field contained between 210 million and 720 million barrels of oil equivalent (boe) and Merah Besar between 100 million and 250 million boe.

"Hopefully, by the end of the year, I can answer the question about how much we are going to produce in the future," Lauer said.

According to Pertamina data, Unocal produced 95,690 barrels per day (bpd) last year making it the country's fourth largest oil producer. It is also the fifth largest natural gas producer with an output of 327 million cubic feet per day (MMCFD).

Unocal's deepwater oil and gas resource will become the first deepwater resource to be developed in the country.

The government has given some incentives for contractors to develop oil and gas resources in deepwater, frontier and marginal fields as oil and gas discoveries have rarely been made in conventional areas over the past decade.

The government takes 75 percent of oil output and between 60 percent and 55 percent of gas output from the development of frontier and deepwater areas, leaving the remainder for the contractors. In conventional areas, the government takes 85 percent of the oil and gas output.

Unocal also said in a statement it has provided two relief packages worth $700,000 and $87,000 respectively to help Indonesians during the monetary crisis.

The packages, which were channeled through the charity group CARE, included medical supports and financial assistance for the education of children of families heavily affected by the crisis. (jsk)