Total to invest six billion in Indonesia oil and gas

22nd January 2007, Comments 0 comments

JAKARTA, Jan 22, 2007 (AFP) - French oil giant Total plans to invest another six billion dollars in Indonesia over the next five years, chairman Thierry Desmarest announced Monday as Jakarta said it wanted better terms before extending key oil and gas contracts.

JAKARTA, Jan 22, 2007 (AFP) - French oil giant Total plans to invest another six billion dollars in Indonesia over the next five years, chairman Thierry Desmarest announced Monday as Jakarta said it wanted better terms before extending key oil and gas contracts.

"We plan to continue with many projects and we will increase by six billion dollars our investment in oil and gas exploration and production, especially in Kalimantan, in the next five years," Desmarest told journalists after meeting Indonesian President Susilo Bambang Yudhoyono at the palace.

He said Total had already doubled its investment to one billion dollars in the past three years.

The six billion dollars, he said, would be used to increase capacity at Total's Mahakam Delta oil and gas block in East Kalimantan, on Borneo island, and to search for new oil and gas reserves. The Mahakam Delta block already employed some 20,000 people, he added.

Desmarest, who was accompanied by Energy and Mineral Resources Minister Purnomo Yusgiantoro, said Total remained committed for the long term in Indonesia.

He said the company was negotiating with state oil and gas firm Pertamina to raise its gas output to meet domestic and export demands, but gave no figures.

Yusgiantoro said the government was preparing to negotiate an extension of Total's contract for the Mahakam block, which ends in 2017, but wanted better terms.

"Our wishes and theirs should be combined," he said, according to the official Antara news agency, adding that Jakarta could take a greater allotment for domestic supply.

"In our talks we also discussed that if there is an extension, part (of the production) should go to the domestic (sector)," he said, without giving further details.

Indonesia has also asked ExxonMobil to submit better terms for the extension of its contract for the Natuna D Alhpa oil block.

"We have asked ExxonMobil to submit better contract terms and conditions than the one signed in 1990 so that it could continue its exploitation of the oil block field," Kardaya Warnika, head of industry regulator BP Migas, said.

President Susilo Bambang Yudhoyono last week promised to offer tax incentives and review regulations in an effort to attract more foreign investment to develop Indonesia's gas reserves.

Rising oil prices have seen Indonesia focus on gas production for domestic needs, rather than for export.

This has worried overseas customers and discouraged foreign investment in the sector, amid confusion over how much gas companies would have to sell at lower prices for the local market, rather than to meet more profitable export demands.

In Indonesia, Total produces more than 500,000 barrels of oil equivalent per day, of which 85 percent is gas.

It supplies 60 percent of the gas requirements of the Bontang liquefied natural gas plant, the largest in the world with an annual capacity of 22.25 million tonnes.

Total's new Sisi and Nubi fields are expected to come on stream this year.

Indonesia is Southeast Asia's only member of the Organisation of Petroleum Exporting Countries, but has become a net oil importer in recent years.

Copyright AFP

Subject: French News

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