Gulf to spend US$ 300 million, intensify exploration in Indonesia

Oil and gas company Gulf Indonesia Resources (GIR) will spend US$300 million in capital expenditures and intensify exploration activities in Indonesia this year, its president Bill Fanagan said Wednesday.

Fanagan told reporters the money would among other be used to build gas facility in South Sumatra and to finance exploration drilling in its production sharing contract (PSC) areas in East Java and Makassar Strait.

Fanagan said thus far GIR and partners had spent more than $300 million to develop its gas facilities in South Sumatera and looking forward to investing another $200 million to complete the construction of the gas facilities in the next two years.

Separately, the company's vice president for administration affairs Supramu Santosa said GIR would start drilling two new exploration wells in the Ketapang PSC Block in East Java this year.

GIR also planned to drill two additional wells in its Sebuku PSC area in Makassar Strait this year following the first drilling which was currently ongoing, he added.

According to Supramu, GIR currently produces 85,000 barrel of oil equivalent per day (boepd), including 40,000 barrels of oil.

"We are hoping to double the output in the next three years after gas from our fields in South Sumatra flows to Singapore and Caltex in Riau," Supramu said.

Fanagan said currently GIR was negotiating a new gas sales and purchase contract but he refused to give details.

The company has been present in Indonesia for 40 years, and has spent a total investment of over $1 billion. (alex)