Chevron signes $2.5 billion Indonesian gas deal with ConocoPhillips
Chevron has signed a preliminary deal worth $2.5 billion to buy gas from ConocoPhillips on the island of Sumatra, Reuters reported.
Chevron apparently needs the gas to support technology used to coax more oil from its Duri field in Central Sumatra. The technology (steamflood) is said to enhance recovery on oil fields.
The new deal is set to replace a previous agreement under which Chervon swapped around 50,000 barrels per day (bpd) of crude oil from Duri with around 400 million cubic feet per day of natural gas from ConocoPhillips' gas field in South Sumatra.
Indonesian energy watchdog official Amir Hamzah was quoted saying they “expect the final purchasing deal to be signed as soon as possible.”
Chevron spokesman Gareth Johnstone was quoted saying the new deal would help Chevron maintain oil production targets.
"This agreement will secure a reliable gas supply for steamflood facilities, which is critically needed to optimize the crude oil production from (the) Rokan Block," he said.
Another Indonesian official, who declined to be named, pegged Chevron's production from its Duri and Minas fields in Sumatra at some 300,000 bpd.
Indonesia has turned into a net importer of crude in recent years, as production slumped after a failure to tap new fields fast enough.
Indonesian crude production is now estimated at some 1 million bpd compared to 1.5 million bpd a decade ago.
Chevron is understood to be the biggest oil producer in Indonesia.
Chevron apparently needs the gas to support technology used to coax more oil from its Duri field in Central Sumatra. The technology (steamflood) is said to enhance recovery on oil fields.
The new deal is set to replace a previous agreement under which Chervon swapped around 50,000 barrels per day (bpd) of crude oil from Duri with around 400 million cubic feet per day of natural gas from ConocoPhillips' gas field in South Sumatra.
Indonesian energy watchdog official Amir Hamzah was quoted saying they “expect the final purchasing deal to be signed as soon as possible.”
Chevron spokesman Gareth Johnstone was quoted saying the new deal would help Chevron maintain oil production targets.
"This agreement will secure a reliable gas supply for steamflood facilities, which is critically needed to optimize the crude oil production from (the) Rokan Block," he said.
Another Indonesian official, who declined to be named, pegged Chevron's production from its Duri and Minas fields in Sumatra at some 300,000 bpd.
Indonesia has turned into a net importer of crude in recent years, as production slumped after a failure to tap new fields fast enough.
Indonesian crude production is now estimated at some 1 million bpd compared to 1.5 million bpd a decade ago.
Chevron is understood to be the biggest oil producer in Indonesia.