U.S. firm Amerada to invest $500m in RI

U.S. firm Amerada to invest $500m in RI

Rendi A. Witular, The Jakarta Post, Jakarta

U.S.-based energy firm Amerada Hess Corp. plans to invest some
US$500 million during the next two or three years to develop its
offshore gas and oil concession in Pangkah, East Java.

Chief executive officer John B. Hess said on Wednesday that
the investment was a vote of confidence in the business climate
in Indonesia, with the company exploring further business
opportunities in the energy sector here.

"Our first commitment is to invest some $500 million for
developing the Pangkah project, which is scheduled to be
completed in 2007," he said standing alongside Minister of Energy
and Mineral Resources Purnomo Yusgiantoro, after meeting
President Susilo Bambang Yudhoyono.

A gas sales agreement for the Pangkah project was signed last
December to provide a supply of 440 billion cubic feet of natural
gas over a 20-year period at an expected plateau rate of 100
million cubic feet per day (gross).

After the completion of the project, Hess said, Amerada had
estimated its oil and gas production in Indonesia would reach
about 25,000 barrel per day (bpd) from the current 5,000 bpd.

Poernomo said the gas from the Pangkah plant would be supplied
to East Java consumers, including state gas distribution company
PT Perusahaan Gas Negara, petrochemical firm PT Petrokimia Gresik
and several other power plants.

Indonesia plans to eventually rely more on gas and coal for
power in the future following a decline in its oil reserves, as
well as the high price of the fuel on the global market.

Amerada also plans to develop other gas and oil concessions
with state oil and gas firm PT Pertamina in Jambi Merang in South
Sumatra and in Makassar Strait.

The company, which has been operating in Indonesia for 10
years, is currently engaged in developing an offshore gas and oil
concession in Natuna island.

It acquired the Natuna Block A in 2003 from UK-based Premier
Oil. Production is on stream, and, under the existing gas sales
agreement is delivered to Singapore through the 675-kilometer
West Natuna Pipeline System.

Amerada also has operations in the United States, United
Kingdom, Norway, Denmark, Equatorial Guinea, Gabon, Azerbaijan
and Thailand.

The company is focusing on increasing reserves outside the
mature regions of the U.S. and the North Sea.