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35

Expensive Oil Rigs Made Indonesia Drill Less

Indonesia, Southeast Asia's biggest oil producer, drilled 62 oil and gas wells this year below the government target,

Indonesia, Southeast Asia's biggest oil producer, drilled 62 oil and gas wells this year, below the government target, because of higher costs of oil rigs, local media reported on Monday.

Indonesia had wanted companies such as PT Pertamina, BP Plc and Conoco Phillips and Total SA to drill as many as 81 wells this year to increase the country's oil and gas reserves, state oil regulator BP Migas Chief Kardaya Warnika was quoted by the JakartaTimes as saying on Sunday in Bandung.

The cost of leasing rigs has climbed to records, nearing 500,000 US dollars a day for the biggest structures, as oil exploration companies move to deeper waters in search of new oil and gas reserves after crude oil prices rose to all-time highs.

"There are some problems that disrupted drilling activities," Kardaya said. "These include land acquisition, licensing and a scarcity of oil rigs as demand surges."

The discoveries would increase the country's reserves by 134.6 million barrels of oil and 3.6 trillion cubic feet of natural gas this year to 8.3 billion barrels and 184 trillion cubic feet, BP Migas said. The oil and gas findings are about 5 percent higher than those in 2004.

Most of the increase in reserves came from fields operated by Pertamina, BP and Conoco Phillips, he said.

The country pumped 1.061 million barrels of crude oil