Investment in oil and gas to reach US$7.4 billion this year

Investment in oil and gas sector is expected to increase by 41 percent this year to US$7.492 billion from about $5.305 billion in 2003 thanks to an increase in new exploration activities, Suara Karya reported on Thursday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Wednesday that of the total investment, about $799 million would be spend for exploration activities, an increase of about 300 percent from US$244 million last year.

Meanwhile the spending for further development is expected to increase by 80 percent to $2.097 billion from US$1.165 billion, and those for production activities is estimated to rise by 13.7 percent to $3.931 billion from $3.458 billion. At the same time, the spending for administration cost is expected to reach $685 million from $438 million this year.

The minister attributed the surge in the total spending in the oil and gas sector to the increase in new exploration activities in new oil and gas fields.

In 2003, the government awarded 15 new oil and gas concessions, with total investment commitment of about $140.9 million, an increase from $29.46 million committed for new concession areas awarded in 2002.

This year, the government will offer another 17 oil and gas blocks, 10 of which will be offered through an auction, while the other seven will be made through a direct offering. (*)