INDONESIA - The Oil/Gas Fields & Operators.

Oil in this archipelago has been produced since 1893, when the islands were ruled by the Dutch. This oil helped turn Shell into a leading conglomerate in the past century. (An independent republic of Indonesia was proclaimed in 1945 and the war for independence ended in 1949).

The following are brief profiles of the main oil and gas fields in Indonesia and their operators.

Pertamina, the state concern established after the war, now accounts for 14% of the country's oil production with an average output of 133,190 b/d. Its target is to raise oil production to 250,000 b/d; but this depends on an agreement with ExxonMobil concerning the oil-rich Cepu block in central-east Java (see Gas Market Trends). Its natural gas production has risen by more than 100 MCF/day in the past three years to about 900 MCF/d. Its geothermal output has risen as well.

Having become a limited liability company in April 2003, when its restructuring was completed, Pertamina operates many small and medium fields mainly in Aceh, Jambi and west Java. They include all the fields that were found and operated by the Dutch before independence and those fields which Pertamina has discovered since the 1960s. Before its restructuring phase, it offered many of its marginal fields to foreign and some local companies for EOR and further development under Technical Assistance Contracts (TACs). Now it has several E&P blocks with local and foreign companies.

Pertamina's upstream activities cover exploration and production of oil, gas, and geothermal energy. Its main objective is to discover new oil and gas reserves as a replacement of hydrocarbons produced. The E&P activities are performed through its own operation and JVs. The business partnership forms are JOB-EOR (Joint Operating Body for Enhanced Oil Recovery), JOB-PSC (Joint Operating Body for Production Sharing Contract), TACs, Consortium Co-operation System, IP (Indonesian Participation), PPI (Pertamina Participating Interest) and project loan. For the geothermal sector, the business partnership model is the Joint Operating Contract (JOC).

Pertamina has a concession block operated by its own unit - Pertamina Upstream - covering seven oil and gas operation areas: Nangroe Aceh Darussalam (NAD); the Northern Sumatra Operation Area, with the main office in Rantau; the Central Sumatra Operating Area, with the main office in Jambi; the Southern Sumatra Operation Area, with the main office in Prabumulih; the Western Java Operation Area, with the main office in Cirebon; the Eastern Java Operation Area, with the main office in Cepu; the Kalimantan Operation Area, with the main office in Balikpapan; and the Papua Operation Area, with the main office in Sorong.

Pertamina Upstream has 64 oil and gas contracts of joint operation arrangements. They consist of six partnerships under JOB-EOR contracts, 12 partnerships under JOB-TAC contracts, 34 partnerships under TACs, one partnership under the Consortium Co-operation System, three project loans, and eight partnerships under IP/PPI contracts. There are eight Joint Operating Contracts for geothermal exertion.

Among 64 of oil and gas contracts within the joint operation arrangement, 30 contracts are in the commercial-producing stage and the other areas are still in the exploration phase. To develop its E&P business, Pertamina Upstream has strategic alliances with local and foreign partners.

Pertamina Upstream has prospective business in oil and gas drilling services called Pertamina Drilling Service (PDS), which owns 28 rig units. In the gas transmission business, Pertamina Upstream has 3,800 km of gas pipelines and 64 compressor stations.

To be privatised in 2006, Pertamina intends to have E&P operations overseas, including Iran and Iraq, and has interests in three oilfields in Algeria.

Pertamina will have three main subsidiary groups for gas, oil refining and upstream businesses. The separate gas group underlines its ambitions in the gas sector as Pertamina is promoting a big LNG venture (see below). In late 2002, the company said it had 960m barrels of proven oil reserves and 8.8 TCF of proven natural gas reserves. Pertamina in early 2003 said it hopeds to raise its oil output to 450,000 b/d by 2007.

Pertamina then said it planned to spend $7.3 bn on upstream and downstream projects over the next five years to help it better survive in a free market economy. Overall investment in 2003 was $1.34 bn, followed by $2.08 bn in 2004, $1.51 bn in 2005, $1.25 bn in 2006 and $1.1 bn in 2007. Some projects will require external funding, such as the planned development of its giant Donggi gas field on Sulawesi, which will export gas in LNG form. Routine spending on upstream and downstream sectors for 2003-07 was set at about $400m per sector per annum. Gross profit, before the state's take, was planned to grow to Rp 24 tn ($2.66 bn) over the five-years period from Rp 11.9 tn in 2003. Reserves were forecast to increase to 1.1 bn barrels of oil and 11 TCF of gas. It said these targets will be achieved partly from its overseas operations.

The Donggi gas and LNG export programme is Pertamina's biggest project. This is based on the onshore Donggi gas field, a giant on Central Sulawesi. The field's proven reserves are estimated at 10 TCF. Of these, 6 TCF are in a block held by Pertamina and 4 TCF lie on an adjacent block held by a 50-50 JOB of Pertamina and the private Indonesian firm Medco Energi's unit Exspan, which has found big gas fields in Senoro/Toili 25 km south-east of Donggi.

With these fields being developed jointly, Pertamina and Exspan say combined gas reserves on their blocks could ultimately reach 22 TCF. A part of the combined reserves is being developed for an integrated $1.7 bn project to export gas in LNG form, with a two-train plant to have a 6m t/y capacity. This will be Indonesia's fourth LNG venture. The LNG would be exported to a terminal planned by Marathon Oil in Mexico's Baja California for the US West Coast.