G

lobal leading equipment and services provider GE Oil & Gas has said that Indonesia, Southeast Asia'€™s largest economy, still has great potential for development in the oil and gas business sector.

Despite declining world oil prices, Indonesia'€™s oil and gas resources remain attractive for investors, according to GE Oil & Gas president and chief executive officer Lorenzo Simonelli.

'€œIndonesia has great resources and opportunity to push through. The new government is already taking action on looking at projects and moving forward the projects, such as IDD, Tangguh and Jangkrik. We are active on all of these projects,'€ Simonelli said in a recent interview.

'€œThe declining oil price makes it more challenging but the long term prospect of the industry is still positive,'€ Simonelli said.

He was referring to a gas project, the Indonesia Deepwater Development (IDD) by Chevron, the Tangguh Train 3 project '€” which is an expansion project handled by BP '€” in Papua and a deepwater gas project covering Jangkrik field led by Italian firm ENI.

The Tangguh Train 3 project is currently ongoing while the Jangkrik project is the only deepwater development in the country currently in progress. As for IDD, Chevron expects to submit a revision of its development plan after the company found new gas resources that will affect the economics of the project.

According to Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) deputy for planning Aussie Gautama, Chevron is calculating the economics of the projects given the current depression in oil prices.

'€œIt is also planning to propose contract extensions for three PSCs [production sharing contracts] involved in IDD, namely Selat Makassar, Rapak and Ganal,'€ Aussie said.

Global oil players are currently under pressure from low oil prices occasioned by the global glut following the success of US shale oil. Many projects are estimated to be put on hold as current prices are not economical.

Indonesia, a former member of the Organization of Petroleum Exporting Countries (OPEC), has been suffering from the declining oil production as its fields are depleted following past exploitation. While attempts to boost exploration activities to secure more hydrocarbons are hampered by challenging geological locations and complex bureaucracy, consumption continues to rise, forcing the country to import a huge amount of oil and petroleum products.

GE Oil & Gas currently has a manufacturing facility in Batam, which the company started to expand in 2013. The expansion covers the construction of a high bay for a new line of subsea wellhead equipment.

The production of vertical subsea trees in Batam is the first for the company in the Asia Pacific region.

GE is currently focusing on its Batam facilities and no expansion in other areas is planned in the near future, according to Simonelli.