U.S. oil major, Chevron Corp , has put forward a development plan for its natural gas fields offshore East Kalimantan, part of Borneo island, Indonesia's oil watchdog said.

Chevron said last year it planned to invest about $6 billion to develop gas fields off the coast of Borneo, part of efforts to crank up flagging Indonesia gas output. Chevron acquired fields in the Makassar Strait between Borneo and Sulawesi with its purchase of Unocal.

"We are still considering whether to recommend Chevron's plan of development for offshore East Kalimantan gas fields," Achmad Luthfi, deputy chief of watchdog BPMIGAS said by telephone.

"It should be no problem for us to agree to the plan, but it is for the minister to approve it," he said.

Santi Manuhutu, a spokeswoman for Chevron Indonesia, said the firm planned to develop several gas fields in East Kalimantan, including Gehem, Gendalo and Bangka.

"This development will require significant capital investment. It will be the deepest in Indonesia, in water depths ranging from 2,500 to 6,000 ft (760 to 1,800 m)," she said by e-mail, without elaborating. The combined natural gas reserves in the area covered by the plan are estimated at more than 3 Tcf, said another BPMIGAS official, who declined to be named.

Indonesia, Asia Pacific's only OPEC member, which has far more gas than oil, has pushed companies to move faster in developing areas as the country badly needs the gas for domestic industries and exports.

Chevron currently produces gas from several other fields in East Kalimantan, but the output is in decline.

Indonesia, the world's second-biggest liquefied natural gas (LNG) exporter after Qatar, has been struggling to meet export commitments due to declining gas output being diverted to the domestic market.

Source: Reuters

Comments