Total to invest six billion dollars in Indonesia oil and gas

Total to invest six billion dollars in Indonesia oil and gas

French oil giant Total plans to invest another six billion dollars in Indonesia’s oil and gas sector over the next five years, chairman Thierry Desmarest has said.

“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 Monday 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 and to search for new oil and gas reserves. The Mahakam Delta block already employs 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.

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, and 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.

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

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