Unocal sees slight decline in Indonesian 2004 capex

U.S. independent oil and gas company Unocal Corp. said it had had allocated a capital expenditure of around US$300 million for Indonesia in 2004, slightly lower than this year’s budget of $350 million.

Unocal Indonesia's president Brian Marcotte said the funds would be spent to finance activities in ongoing operations in shallow water, expansion of deepwater operations and exploration.

He downplayed the significance of the decrease, saying that it was only "a matter of time allocation, as required by the projects’ schedule".

Marcotte said budget for exploration in 2004 would be around $60 million

Marcotte said despite exploration success to accumulate huge reserves of natural gas in its East Kalimantan operations, Unocal would continue its exploration program. But, eventually it will focus on appraising and to certifying its gas discoveries to enable the company to get a bigger portion of the future new gas sale contracts in East Kalimantan.

In the past few years, Unocal has been very successful in making new gas discoveries estimated at around 8-12 TCF.

Marcotte said the gas reserves certification became the company’s priority to anticipate possible contract extensions for the Bontang LNG plant after 2010, and to anticipate other new gas sales from East Kalimantan. ”We are aiming to increase our future gas portion in Bontang,” he said.

Under the East Kalimantan Gas Management System, any new sale contracts would be shared proportionally among the province's gas producers based on the volume of their respective certified and uncommitted gas reserves.

Currently, Unocal contributes around 150 MMCFD to the Bontang LNG plant. Unocal's CEO Charles Williamson has predicted that the company’s gas production in Indonesia could be increased to between 800 MMCFD and 1.3 BCF in 2010-2011. (alex)