RI may prefer lead role in oil, gas: Kalla

Aditya Suharmoko, THE JAKARTA POST, THE HAGUE | Tue, 02/10/2009 11:23 AM  

Indonesia will gradually improve the roles of local energy companies and will not let foreign firms control the country’s energy resources, Vice President Jusuf Kalla says. 

“No single country in the world allows foreign entities to manage its energy resources. 

“The Indonesian government has the right to manage its energy resources, and President (Susilo Bambang Yudhoyono) agrees with it,” Kalla told reporters Monday in The Hague. 

He did not give details, but cited the fact that most of the country’s big energy projects, in particular in the oil and gas sector, are controlled by multinational giants. 

In the oil sector for example, state oil and gas company PT Pertamina only produces between 115,000 and 125,000 barrels of oil per day, way below US energy giant Chevron Corp. which produces more than 400,000 barrels of oil per day which accounts for around 45 percent of the country’s total oil output. 

Boosting the roles of local companies does not necessarily mean rejecting the partnership role of their foreign counterparts as the country still needed their financing and their internationally recognized expertise, Kalla said. 

The Vice President pointed as an example of a good cooperation between local and foreign companies to the efforts to develop the massive Natuna block, for which Pertamina has been handed the lead role. 

He said the government had shortlisted Norwegian-based StatOil, China-based PetroChina, Thailand-based PTT and Netherlands-based Royal Dutch Shell, along with established player US-based ExxonMobil to develop the Natuna block, together with Pertamina. 

In his three-day Netherlands visit, Kalla said the government had also opened up the possibility for Shell to operate in the Natuna block, while offering the company the chance to relocate its Singapore refinery to Batam, Indonesia. 

He claimed Netherlands Prime Minister Jan Peter Balkenende had expressed interest in Indonesia’s strategic offer. 

Exxon’s contract to operate the Natuna block expired in 2005, Kalla said. 

“I have said since the beginning that Exxon’s contract automatically expired in 2005. We have given them a chance to renegotiate the contract but they did not make use of it.”

“So it is our chance to self-manage our energy resources,” he said. 

The government has hinted that PT Pertamina should consider to take the lead in all oil and gas energy projects in the country. 

Kalla’s statements came as the country has intensified efforts to bolster oil production, which has been on the decline over the past five years due mostly to aging fields. 

The country’s oil production is targeted to reach 960,000 barrels of oil per day this year. 

To help achieve this, the upstream oil and gas regulator BPMigas has reported that oil and gas contractors propose to spend up to US$13.15 billion on investment in production and exploration in the oil and gas sector in 2009. 

About $12.95 billion of the planned investment would be spent on production activities and only the remaining $201.57 million on new exploration. 

Of the $12.95 billion of investment planned for production, $3.73 billion will be allocated to drilling activities in 1,237 wells, $2.85 billion will go on production facilities, $4.72 on operational production and US$1.64 will be spent on administration.