Oil and gas companies to spend big in 2009

Oil and gas contractors have proposed to the regulator to spend up to US$13.15 billion on investment in exploration and production in 2009.

These investment plans were submitted to BPMigas through the companies' 2009's working and budget programs, BPMigas's chairman R. Priyono told reporters and industry players Tuesday.

About $12.95 billion of the planned investment would be spent on production activities and the remaining $201.57 million on exploration, Priyono said.

Of the $12.95 billion of investment planned for production, $3.73 billion will be allocated to drilling activities in 1,237 wells, $2.85 billion for production facilities, $4.72 for operational production and US$1.64 for administration.

"The proposed budget plans were submitted by 53 out of 64 contractors at the production stage. So, the (investment) figure could actually be higher," Priyono said.

The $201.57 million budget allocated for exploration will be spent mostly on geological and seismic surveys.

"Exploration activities have shown very good results this year. Thus, there will be more drilling and other activities next year," Priyono said looking at next year's business prospects as compared to this year's.

As of the end of October, oil and gas operators have spent $8.65 billion.

Roberto Lorato, President of the Indonesian Petroleum Association (IPA), said that next year's investment target was still logical.

"The plan is quite challenging as the oil price is declining, but I think it is still possible," he said.

BPMigas estimated oil lifting achieved until the end of this year would be 988,060 barrels oil per day (bopd), higher than the initial target of 977,000 bopd.

Priyono said that average oil production in 2008 was 978,000 bopd, adding that production is targeted to average 960,000 bopd next year.

Priyono said the declining oil production of PT Chevron Pacific Indonesia, a local subsidiary of the second largest oil company in the U.S., would lower Indonesia's total oil production next year.

"Chevron's production is declining due to aging fields. As the company output is very big, about 400,000 bopd, the decline is difficult to set off against finding new fields," Priyono said.

Chevron earlier said its Duri and Minas concession in Sumatra might only produce 405,000 bopd this year, down from the 408,000 bopd target set by the government and from the 425,000 bopd pumped last year.

BPMigas said nine oil and gas fields with a total capacity of 5,336 bopd and 521 million cubic feet per day of gas (MMSCFD) would come onstream next year.

taken from: jakarta post