Chevron’s Indonesia Deepwater Natural Gas Project to Face Delay

Chevron Corp. (CVX) is delaying developing a second phase of a deep-sea natural gas project off Indonesia’s Borneo island due to start in 2019.

The final investment decision for Gendalo-Gehem won’t be taken this year, a Chevron spokesman said in an e-mail statement yesterday. The San Ramon, California-based company has yet to submit a revised development plan for it, Zudaldi Rafdi, a spokesman at SKK Migas, Indonesia’s upstream oil regulator, said in a phone interview yesterday.

“The project may face delay,” Rafdi said. “Once the revised plan is submitted, it will take six to nine months for reviews before submitting to the energy ministry for approval.”

Indonesia, Southeast Asia’s largest crude producer, is struggling to stem a decline in output from aging oil and gas fields that led to the country withdrawing from the Organization of Petroleum Exporting Countries in 2008. Incoming president Joko Widodo, who takes office on Oct. 20, has pledged to cut red tape and spur oil investment.

Chevron asked for more time in revising the development plan as it found additional reserves and needs to extend production-sharing contracts, Naryanto Wagimin, the upstream oil and gas director at the Energy and Mineral Resources Ministry, said in a phone message yesterday.

The facilities for Gendalo-Gehem, with investment of $4 billion to $7 billion, are part of a Chevron development including the Bangka, Maha and Gandang fields, according to the ministry. The project will build two separate hubs, each with its own floating production unit, according to Chevron’s website. It’s expected to pump as much as 1.1 billion cubic feet a day of gas and 47,000 barrels of condensate, the company’s data show.

Chevron has obtained all the required government approvals to develop Bangka field, the project’s first stage, the company’s spokesman said. 

Source : http://www.bloomberg.com/news/2014-10-16/chevron-s-indonesia-deepwater-natural-gas-project-to-face-delay.html