The Jakarta Post
State-owned oil company Pertamina intends to invest about US$7.8 billion for business development, most of which is to go into the upstream sector next year.
Pertamina president director Nicke Widyawati told reporters in Jakarta on Tuesday that “the largest share of investments will go to the Mahakam Block”.
The Mahakam oil and gas block in East Kalimantan, which is Indonesia’s largest gas block, was taken over by Pertamina from France’s Total E&P Indonesie and Japan’s Inpex Corporation early last year.
Despite the block’s huge potential, oil and gas reserves are confined to thousands of small, isolated, underground pockets, which means Pertamina has to continually drill new wells – rapidly increasing production costs – to tap the fluids.
Pertamina’s former finance director Pahala Mansury told reporters two days earlier that the company would invest between $3.5 billion and $3.7 billion next year to develop upstream operations, whereby more than $1 billion would be invested in the Mahakam Block.
“For refineries, we will invest more than $1.5 billion, particularly for the Balikpapan and Tuban refineries,” he said.