Unocal says RI still attractive despite uncertainties

American oil and gas company Unocal Corporation said Indonesia oil and gas sector was still attractive to foreign investors despite lots of uncertainties currently being experienced by the country's oil and gas contractors.

President of Unocal Indonesia Company Brian W.G. Marcotte said the country's oil and gas contractors were concerned about the current uncertainties in the security of their operations, their contracts, pending changes of oil and gas law, and the impact of the decentralization program that the Indonesian government planned to introduce next year.

They also feel uncertain about fiscal terms, their desire to renew their contracts to extend the live of their oil and gas fields, and the availability of markets for their large gas reserves, Marcotte said.

Nevertheless, he said, Unocal was still optimistic about the future of investment in the country's oil and gas sector

"The good news is that there is an opportunity to positively respond to all of these uncertainties. And this is what keeps Unocal's optimistic attitude towards Indonesia," Marcotte said on Wednesday in his speech at the Indonesian International Oil, Gas and Energy Conference and Exhibition (IIOGE).

Marcotte said he believed foreign investment in the country would surge if Indonesia was able to handle the uncertainties the positive way.

He said Indonesia's oil and gas sector was still attractive to foreign investors thanks to several factors, including the abundant hydrocarbon resources and low finding cost, accessible discoveries and reasonable development cost, the availability of experienced personnel and rapidly evolving technology.

Other encouraging factors were the fact that the country's oil and gas industry had an excellent record of cost control and innovations and the government's strong need for energy development.

Many analysts have said that Indonesia has been gradually losing attraction for foreign investors given its dwindling hydrocarbon reserves.

But, Marcotte said the new discoveries made by Unocal in the deepwater areas in the Makassar Straits over the past several years had refuted the allegations.

Unocal has discovered among others the West Seno and Merah Besar fields in the Makassar Straits production sharing contract block. It would start production at the West Seno field in the latter part of 2002 with the capacity of 60,000 and 70,000 barrels of oil equivalent per day, Marcotte said.

Quoting Pertamina's data, Marcotte also said Indonesia has more than 130 trillion cubic feet of natural gas capable of being developed, but he said most of the gas reserves fell into the definition of stranded gas", that is gas without market.

Marcotte thus called on the government to benefit from the huge gas reserves by among others making use of them in the power generation sector, noting that gas was cleaner and more cost efficient than several other types of fuel in power generation. (*)