Chevron to invest $6 bln in Indonesia gas fields http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2006-10-09T080349Z_01_JAK287981_RTRUKOC_0_US-ENERGY-INDONESIA-CHEVRON.xml
Mon Oct 9, 2006
JAKARTA (Reuters) - Chevron Corp. (CVX.N: Quote, Profile, Research) plans to invest about $6 billion to develop gas fields off the coast of Borneo, aiming to crank up flagging Indonesian gas output, a senior official at the country's oil watchdog said on Monday.
Indonesia, the world's top liquefied natural gas (LNG) exporter, has failed to meet its contractual commitments to traditional buyers such as Japan, South Korea and Taiwan because of a slump in production.
"Chevron said it wanted to develop gas fields in East Kalimantan, including Gehem and Gendalo until 2012 with investment of about $6 billion," BPMIGAS chief Kardaya Warnika said via a telephone text message.
East Kalimantan is an Indonesian province on Borneo.
Warnika said Chevron had told an Indonesian delegation chaired by Vice President Jusuf Kalla during a U.S. trip last month it wanted to invest more in the energy sector in Southeast Asia's top economy.
Chevron Indonesia president director Suwito Anggoro confirmed that the firm would develop several gas fields offshore East Kalimantan. "We will submit plans on development next year. If approved by BPMIGAS then we will develop those fields," Anggoro said.
Another BPMIGAS official, who declined to be identified, said the Gehem and Gendalo gas fields were seen as having the potential to boost gas production and help offset declining output from other gas fields in the province.
Chevron currently is supplying the Bontang LNG plant with about 200 million cubic feet per day of gas. Total (TOTF.PA: Quote, Profile, Research) is supplying the plant in East Kalimantan with about 2.6 billion cubic feet per day, while Vico Indonesia supplies around 600 million cubic feet per day.
Vico's shareholders include BP Plc. (BP.L: Quote, Profile, Research) and Italian energy group Eni SpA (ENI.MI: Quote, Profile, Research).
Indonesia has said it would favor domestic gas sales after major export contracts to Japan lapse, cutting back on a major hard currency export earner.
Indonesia has said an 8.4 million tonne-per-year (tpy) LNG contract with Japan expires in 2010 and another 3.6 million-tpy deal ends in 2011, equivalent to about two-thirds of Japan's total LNG imports from Indonesia.
Indonesia is pushing to increase natural gas as an alternative source of energy as global oil prices soar and its domestic crude reserves dwindle.
© Reuters 2006. All Rights Reserved.