Amerada Hess to spend $500m on E. Java gas field

U.S. oil producer and marketer Amerada Hess will spend $500 million to develop the Pangkah natural gas field in Indonesia, a company executive said on Wednesday as quoted by agency.

Last December, Amerada signed a gas sales agreement with state electricity firm PT Perusahaan Listrik Negara to supply 100 million cubic feet per day of gas to a power plant in East Java from early 2007. The gas will come from Ujung Pangkah field in offshore East Java.

"The Pangkah development itself would be $500 million. We think the production from that should be in a range of 25,000 barrels of oil equivalent per day," Amerada Hess Corp. Chairman John Hess told reporters in Jakarta.

He gave no figure for possible crude oil output from Pangkah.

Hess said his company was evaluating new exploration areas being offered by the Indonesian government.

"We are interested in doing more exploration in the country and looking at new oil and gas developments ... We are doing evaluations," he said.

Indonesia has said it will open 43 new areas for oil and gas exploration this year in a bid to shore up declining oil reserves and output.(*)