CPI to invest $400m in oil field development

Oil and gas company PT Caltex Pacific Indonesia (CPI) plans to invest between US$300 million and $400 million in 2004 to optimize development of its oil fields, Bisnis Indonesia and The Jakarta Post newspapers reported on Tuesday.

This new investment is needed to maintain between 510,000 and 515,000 barrels per day (bpd) of oil and gas production level next year despite the current decline in output due to maturing oil fields, PT Caltex president director Humayunbosha said in Jakarta on Monday.

He did not specify how the funds would be utilized, but a source with the company stated that the company's new venture and development team is reviewing the possibility of obtaining new oil and gas blocks, both onshore and offshore.

He was speaking to reporters on the sidelines of a hearing with the House of Representatives Commission VIII on energy and mining affairs.

CPI also stated its plans to reduce its workforce by 20 to 30 percent in order to increase efficiency and reduce operating costs.

Under the production sharing contracts (PSC), the government must compensate contractors' recovery costs, thus taking away revenues it gained from the contractors.

CPI was able to push down the current year's operating costs by $32 million. In addition, over the past three years CPI has continuously contributed over $3 billion yearly into government coffers. The company estimated that for every $28.2 per barrel of oil it sells, it can give back $19.8 towards government revenue. (*)