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INDONESIA - The Oil/Gas Fields & Operators.

Oil in this archipelago had 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 9.7% of the country's oil production with an average output of 123,190 b/d targeted for 2003. Its gas production is to rise from 873 MCF/d in 2002 to 904 MCF/d in 2003. Its geothermal output will rise as well. To become a limited liability company next month, when its restructuring will be completed, it 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 the current restructuring phase under a new oil and gas law in effect since late 2001, 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 in partnership with local and foreign companies in JVs called joint operating bodies (JOBs).

Pertamina's audited assets have recently been revalued at 138.8 trillion rupiah ($15.7 bn). The government will hand over some of Pertamina's assets, which include oil and gas fields and stakes in LNG ventures, to a holding firm to be locally known as Persero. The government is ending Pertamina's decades-old monopoly over much of Indonesia's energy sector, with its privatisation scheduled for 2006. How the assets will be split among the holding firm, the state and others is yet to be decided.

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 hopes to raise its oil production to 450,000 b/d by 2007.

Pertamina plans to spend $7.3 bn on upstream and downstream projects over the next five years to help it better survive in the free market economy. Overall investment in 2003 will be $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 appraisal and development of its giant Donggi gas field on Sulawesi, which will export gas in LNG form. Routine spending on upstream and downstream sectors will be about $400m per sector per annum from 2003 to 2007. Gross profit, before the state's take, is planned to grow to Rp 24 tn ($2.66 bn) over the next five years from Rp 11.9 tn in 2003. Petroleum reserves are forecast to increase to 1.1 bn barrels of oil and 11 TCF of gas. These targets will be achieved partly from its overseas operations (see below).

After becoming a limited liability firm in April, Pertamina will work on a $130m bond issue for its unit Pertamina Tongkang to finance domestic projects worth $5-10m and Pertamina Tongkang's perchase of two oil tankers. Shortlisted underwriters are UBS Warburg/Mandiri Sekuritas, Credit Suisse First Boston/Andalan Artha Advisindo Sekuritas, and Citicorp/Bahama Securities. The bonds are likely to be marketed abroad.
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Publication:APS Review Oil Market Trends
Date:Mar 10, 2003
Previous Article:INDONESIA - Operating Costs.
Next Article:INDONESIA - Pertamina - Profits & Discoveries.

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