Conoco Focuses on Indonesia
Conoco expects to spend over $2.5 billion in Indonesia during the next nine years, as part of planned investment of $3.4 billion between 1998 and 2010.
Patrick Meyer, Conoco Indonesia president and general manager, said the company remained focused on Block B in the Natuna Sea where all its current production comes from. He said Conoco would double crude output and quadruple gas production before the end of the decade.
Conoco is set to invest approximately $3.4 billion through 2010 on a gas pipeline, drilling, additional platforms, and also on the Belanak FPSO. To date, the company has already spent approximately $750 million.
Conoco pumps about 44,000 barrels per day of crude mainly from the Belida field, which was developed a decade ago and is seeing output decline by 15 percent per year. The company's production is expected to steadily decline until 2004 when the Belanak oil and gas field starts up, bringing output back up to 60,000 bpd.
Belanak is being developed using an FPSO and is due to begin production in the third quarter of 2004. By 2007, Conoco's crude output was expected to double from today's level to about 80,000 bpd, the bulk of which would come from Belanak.
Conoco Indonesia has shifted its focus to gas production, partly due to changes the company's global strategy but also due to more attractive incentives offered by Pertamina. Conoco has a 35 percent stake in Block B compared with a more usual 15 percent contractor shareholding given for oil blocks. It currently produces about 100 million cubic feet a day (cfd) of gas. Emphasis will continue to be placed on aggressively developing gas reserves instead of oil. Over the next five years plans for two platforms, the Belanak FPSO, and the installation of subsea gas wells to supply gas Singapore and Malaysia will be developed. Under an agreement signed last March, Indonesia will supply pipeline natural gas from Block B to Malaysia with deliveries to start in August of 2002. Block B is also part of the West Natuna consortium, which has been supplying gas to Singapore since early last year. Gas output is expected to rise fourfold by 2007 to 400 million cfd. Over the next five to six years, Conoco will be transforming the business from oil to gas and in terms of size and will be looking at production size three to four times where it is today. Additional gas is in line with volumes already contracted to Singapore and Malaysia and will come mainly from Block B. Seismic studies on the company’s newly awarded Nila block will take place later in 2002, but it would take at least three years before the size of the field's reserves can be stated with accuracy. Nila is adjacent to Block B.