Total to intensify drilling campaign in Indonesia

French oil and gas giant Total S.A. will intensify its drilling campaign in Indonesia in the coming years to tap its remaining gas reserves and supply the country?s largest LNG plant in Bontang, East Kalimantan.

The firm, the country?s biggest gas producer at present, is the main supplier of natural gas to PT Badak NGL?s plant in Bontang. Two other suppliers, Chevron and Vico Indonesia, a joint venture of BP Plc and Eni, have seen the supplies to the plant declining over the past years.

Total E&P Indonesie?s president Phillipe Armand said that the company would invest a total of $8 billion for exploration and production activities at its Mahakam Block in East Kalimantan until 2015.

Next year, the firm will spend US$2.2 billion next year, including $1.6 billion for capital expenditure, $500 million for operation expenditure and $100 million for exploration.

The company would maintain its natural gas output at 2.6 billion cubic feet per day (bcfd) next year, he told reporters on Tuesday in Balikpapan, East Kalimantan.

This year, aside from 2.6 bcfd of gas, the company produces between 75,000 and 80,000 barrels of oil and condensate per day.

Meanwhile, company vice president for drilling, well service and logistics Darto Sayogyo said the firm planned to drill 27 development wells in Mahakam Block?s Sisi and Nubi fields from April 2007 through 2009. Gas production at the fields is expected to start in November next year.

In addition, Total expected to drill 118 wells at Tunu field, 90 wells at Tambora field and 18 wells at Peciko field, he said.

This year, the company had drilled 120 wells, more than the yearly target of 100 wells, Darto said.

The East Kalimantan fields owned by Total and its partner Inpex Holdings Inc., which produce enough to meet 40 percent of Japan's demand, have about 13 trillion cubic feet of reserves left after pumping 10 trillion cubic feet since starting up in the 1980s.

Reserves in the fields, including Tunu and Peciko, may keep producing for another quarter century provided the shareholdings and prices give an adequate return on the investment, Armand said.

?Reserves is an economic concept,'' Armand said. ?If the price is down, if the profit isn't shared with the companies, they're not going to invest.'' (Godang)