Chevron Corp., the second-largest US oil company, will review a US$7 billion project to extract natural gas in Indonesia’s first deep-sea drilling venture because of the global recession.
Chevron will consider the cost and schedule to develop the Ganal gas fields off the country’s part of Borneo, Suwito Anggoro, president director of the oil company’s Indonesian unit, said in an interview in Jakarta today.
Chevron joins oil companies including Singapore Petroleum Co in reviewing projects after crude prices dropped more than US$100 a barrel from their July peak of US$147.27 as the global recession damps demand. Producing gas from the Ganal area would be expensive as it requires drilling in the seabed about 3,000 feet (914 metres) below the surface.
“We see it is as a prospective project in the future,” Anggoro said. “We’re committed to developing the deep-water areas.”
The project, of which Chevron owns 80% and Eni SpA the rest, would boost supply to a liquefied natural gas plant at Bontang in East Kalimantan province and may allow Indonesia to export more LNG than initially planned. The field may pump close to 1 billion cubic feet a day of gas at its peak, about 13% of Indonesia’s output last year.
“We’re waiting for Chevron to submit the revision to the plan of development to us,” said Achmad Luthfi, deputy of planning at Indonesian oil and gas regulator BPMigas.
LNG is natural gas that has been cooled to liquid form for transport by ship. Import terminals return the fuel to gas so that it can be sent through pipelines to customers such as factories, power stations and households.