Kuwaiti Oil Firm to Invest $300MM for Increase in Indonesian Output

Xinhua News Agency

The Kuwaiti oil and gas company KUPPEC, a subsidiary of Kuwaiti Petroleum Corporation, would invest another US $200 to $300 million in Indonesia within 2 to 3 years, a KUPPEC top official said here Tuesday.

KUPPEC Deputy Managing Director A. Naser Y Al-Fulais told reporters after meeting with Indonesian Vice President Jusuf Kalla that the additional investment aims at boosting production from the current output of 15,000 barrel per day.

"We may increase $200 or $300 million in oil and gas sector within 2 to 3 years. Our target is to double that (15,000 barrel per day) within a very short period. We want to take advantage of that. We want to acquire more production and reserves in Indonesia," he said.

The official said that his company, which has already operated in Indonesia for over 20 years with a total investment of one billion U.S. dollars, is looking for new partners.

KUPPEC has already had partners in Indonesia including Hess, Premier Oil, and Japex.

The Indonesian government has encouraged investing in oil-and- gas exploration by providing incentives to boost energy production to meet rising demand of oil and gas.

The growing population and economic activity in Indonesia, which leads to the rise of oil consumption, has made the country become a net oil importer since 2003, as it failed to find new blocks amid the aging wells, which causes declining in production, according to Indonesian Minister of Mines and Energy Purnomo Yusgiantoro.

Indonesia oil production has decreased to less than one million barrel per day since February 2008.

There is something here they are not being straight about.

They never mentioned that they sold their majority shareholding of their Bula field operations to the Chinese (CITIC) and that the field is in severe decline.

One can only assume that Hess, premier and Japex will see the benefits of this largesse while Bula goes quietly off-line.