Conoco to double spending on Indonesian gas fields

Conoco Inc, the fourth-largest U.S. oil company, will double its spending on Indonesian gas fields next year to pipe the fuel to Malaysia and Singapore despite worries among foreign investors about Indonesia?s political stability.

Bloomberg reported on Tuesday that Conoco Indonesia president Patrick Meyer has said it plans to spend $209 million on the Block B area of the West Natuna Sea gas fields next year, up from $93 million this year. The fields are being developed with Indonesia's state oil company Pertamina, which agreed to sell the gas to SembCorp Gas in Singapore and Petroliam Nasional Bhd, Malaysia's state oil company.

?What we're involved with almost entirely is the development of those gas reserves to feed the Malaysia and Singapore contracts,?? Bloomberg quoted Meyer as saying on Tuesday.

The first gas delivery to Singapore started in January this year while delivery to Malaysia will start in August 2002.

Conoco have 65 percent working interest in the block while Japan oil and gas firm Inpex holds the remaining 35 percent.

Conoco, which agreed to a $15.4 billion merger with Phillips Petroleum Co over the weekend, will increase spending even as other foreign investors cut back because of concern about Indonesia's political stability.

Spending on Indonesian oil and gas fields in the first nine months of this year was just 30 percent of this year's target of $5.44 billion, Pertamina said in October. Indonesia's Investment Coordinating Board approved $6.1 billion of foreign investment from January to September this year, less than 40 percent the figure for the whole of 2000.

Conoco plans to raise spending on development projects across Southeast Asia to $500 million in 2002 from $390 million in 2001, the company said. Conoco also has interests in five offshore blocks in Vietnam as well as holdings in Malaysia and Cambodia. (*)