Inpex to develop indonesian oil fields with major oil firms

Japan's Inpex Corp. plans to start producing crude oil and natural gas in Indonesia jointly with a number of large foreign oil companies from 2005, sources at Inpex said Tuesday.

The moves are partly aimed at strengthening the firm's profit base and diversifying development risk.

Japan's top oil exploration company obtained the rights to develop two oil and gas fields in an auction held by the Indonesian government. One of the fields is a 3,800-sq.-kilometer offshore area 200km northeast of Balikpapan, Borneo. The company obtained the rights to the Dongara field jointly with TotalFinaElf SA of France.

The firms will start test-drilling next year, and expect to produce about 500,000 barrels of oil and gas a day, equivalent to the current output of a neighboring field. They will split the output 50-50.

The Japanese company has also obtained similar rights to the Nila field jointly with Conoco Inc. of the U.S. They plan to begin drilling in the 5,270-sq.-kilometer field 1,200km north of Jakarta in 2003, hoping to produce several hundred thousand barrels a day. Inpex holds a 35% stake in the project.

Inpex was scrambling to find new income sources because its contract with its main field is scheduled to expire in 2017.

The company is expected to go public as early as fiscal 2003 because Japan National Oil Corp., which holds a 50% stake in Inpex, is slated to be abolished.(*)