CNOOC set in increase presence in Indonesia

China oil giant China National Offshore Oil Corp. (CNOOC) said it will continue to increase its presence in Indonesian energy industry by eyeing more investment in energy projects.

"We a are already the biggest offshore oil producer in Indonesia after taking over Repsol-YPF assets this year and we are encouraged to seek for more good investments," said president Wei Liucheng on a sideline of Indonesia-China Energy Forum in Bali Wednesday.

Wei said that the company is interested in acquiring several exploration blocks in Indonesia, but he did not give specific detail about the blocks.

BP PLC, the operator of production sharing contract blocks that make up Tangguh LNG project in Papua province, had just agreed to give up around 12 percent working interes in Papua PSCs to CNOOC in return of CNOOC's purchasing of 2.5 million tons of LNG for 25 years starting 2007. The deal would give CNOOC more than 2 trillion cubic feet in gas reserves in Papua.

CNOOC on Wednesday had also signed memorandum of understanding (MoU) with state gas distribution company PGN in which it would participate in PGN's ambitious pipeline project that would link gas-rich province of East Kalimantan to industrial island of Java. The project is estimated to cost US$ 1.7 billion.

"Our strategy in investing in Indonesia is to tap export market and at the same to get involved more in Indonesian domestic energy industry . That's why the East Kalimantan to Java pipeline project is of high interest to us," said CFO Mark Qiu. "We want to tap Indonesia's huge energy resources and market potential."

CNOOC is already Indonesia's largest offshore oil producer with production of around 110,000 barrel per day (BPD).

Meanwhile, CNOOC Indonesian operation president Bill Murray said oil CNOOC oil production would increase slightly net year.

He said company's net capital expenditure on existing Indonesian oil, gas assets would reach US$ 210 million for next year, higher than this year's spending

But Qiu said by farming-in into BP's PSC's in Papua, the company would pump more investment to Indonesian starting next year as the development of Tangguh LNG project would commence next year.

"We will pay our share of investment in Tangguh project year after year until it come into completion in 2006. Within the next few years, capital expenditure in Indonesia will be significantly increasing," he said.(alex)