Total, Inpex to spend $1.5b on Indonesia gas drilling next year: Report

Total SA, Europe's third-largest oil producer, and equal partner Inpex Corp. will spend about US$1.5 billion drilling for natural gas in Indonesia next year to meet soaring demand for the fuel, Bloomberg reported.

The partners plan to start developing the Sisi and Nubi fields off East Kalimantan next year, Ananda Idris, a spokesman of Total's Indonesian unit, said in a phone interview on Wednesday.The fields will help Total to maintain its commitment to supply 2.5 billion cubic feet a day of gas to PT Badak NGL in Bontang, the world's largest liquefied natural gas plant.

"Most of the money will go to the Sisi-Nubi development," Idris said. "We expect the fields to start producing in 2007 with a production target of about 500 million standard cubic feet a day."

Total and Inpex are the biggest suppliers to the Bontang plant. Indonesia, the world's biggest exporter of LNG, hopes higher output from Total will compensate for a shortfall from fields operated by Chevron Corp. and Vico Indonesia, a venture of BP Plc and Eni SpA, and help the country meets its export commitments.

Falling gas output from Chevron and Vico forced Indonesia to negotiate with LNG buyers to accept fewer shipments from the Badak plant. Last week, state oil regulator BPMigas said buyers had agreed to take 30 fewer cargoes from Badak next year, cuttingIndonesia's LNG exports by about 10 percent. (*)