Indonesia sees E&P spending at $7 bln in 2004

Indonesia expects spending by foreign firms in the oil and gas sector to rise 55 percent to $7 billion in 2004, oil and gas watchdog BP Migas said on Wednesday.

"We forecast total foreign spending at $7 billion, including $800 million on exploration and $1.3 billion on development," BP Migas deputy chief Zanial Achmad told reporters.

He said foreign spending in the oil and gas sector was estimated at $4.51 billion in 2003, including $473 million on exploration and $913 million on development.

"At this moment, we haven't yet got the figures for exact spending in 2003, so we have used an estimated figure," Achmad said.

"We hope with the increase in exploration spending, the contractors will find new oil and gas reserves in Indonesia, and in the end boost production," he said.

Indonesia's energy minister on Monday proposed to the cabinet boosting incentives for investors in the oil and gas industry to boost exploration.

Purnomo Yusgiantoro, also OPEC President, told reporters after a regular cabinet meeting he wanted standard production contract splits changed to benefit operators more. He gave no details.

The current split for oil favours the government 85:15, while it is 70:30 percent for gas.(*)