State oil firm Pertamina is upping its previous pledge to boost Indonesia’s sag in energy output.
Indonesia's state oil company Pertamina has said it plans to invest US $1.54 billion in the upstream and downstream sectors during 2007. The figure is 40% higher than originally projected due to the country's recent sag in output.
Pertamina will explore untapped oil and gas areas in Indonesia, a country that has struggled to maintain output due to an inability to tap new oilfields fast enough.
The company plans to drill 30 exploration wells this year, compared with six wells in 2006. In a statement, Pertamina said it is aiming to raise crude oil output to 118 000 barrels per day (bpd) in 2007 from its own operations, compared with 107 000 bpd last year.
Pertamina has already received around US $500 million in loans from foreign banks this year, and will tap into internal funds for the new investment. An official from the company admitted funding was still needed for a new 50 000 bpd gasoline cracking unit it plans to build in the Cilacap refinery, with Japanese firm Mitsui.
"Pertamina has to prepare financing for downstream activities in Cilacap, which needs big investment," said the official. "The construction of the new unit is expected to begin this year. The Cilacap refinery in central Java has a capacity of 348 000 bpd."
The company is currently operating nine refineries, with a total capacity of around one million bpd, but serves just 70% of Indonesia's domestic oil consumption.
The pledge follows shortly after Pertamina announced it had signed a letter of intent with Statoil ASA, further strengthening cooperation between the two companies. The signing, which took place in Jakarta, was the result of the two companies being awarded the Karama deep water block in the Makassar Strait. Statoil also holds an interest in the neighbouring Kuma block.
The agreement stipulates that the two companies will jointly pursue exploration opportunities, particularly in Indonesia's eastern territories, which are said to hold rich reserves.