INDONESIA - Gas Production.

Natural Gas production has increased in recent years in Indonesia, in 2006 having averaged 8,104 MCF/day and the government is hoping this will not decline in 2007. The country is facing a declining global LNG market share. According to OGJ, Indonesia had 97.8 TCF of proven natural gas reserves as of January 2007. According to Jakarta, more than 70% of the country's gas reserves are located offshore, with the largest found off Natuna Island, East Kalimantan, South Sumatra, and Papua. Pertamina and six IOCs dominate Indonesia's natural gas industry, accounting for more than 90% of the country's production. The six companies are: Total (estimated market share in 2004, 30%), ExxonMobil (17%), Vico (a BP-ENI joint venture, 11%), ConocoPhillips (11%), BP (6%), and Chevron (4%).

The government in late 2006 said it will encourage state-owned gas distributor PT Perusahaan Gas Negara (PGN) to co-operate with Sojitz Corp to develop coalbed methane (CBM) in South Sumatra. Energy and Mineral Resources Minister Purnomo was to sign an initial MoU with Sojitz to study development of CBM in a number of areas in the country. The chief researcher at the ministry Neny Sri Utami said PGN will be asked to co-operate with Sojitz to develop and commercialise a number of CBM fields in South Sumatra. Utami said Sojitz was ready to invest heavily in the plan and PGN had the potential to team up with Sojitz. The government already has a number of non-commercial CBM projects in the Rambutan field, Muaraenim in South Sumatra. Drilling has been made in three wells in Rambutan and in 2007 drilling will be made in two more wells to determine the strength of reserves in that area. Prospective investors have asked for data about the reserve.