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Indonesia Aims to Create 3,000 New Jobs through Higher O&G Spending

Indonesia's SKMigas said Tuesday that in line with its increased oil and gas expenditure this year, it expects some 3,000 new jobs to be created.

Indonesia's SKMigas said Tuesday that in line with its increased oil and gas expenditure this year, it expects some 3,000 new jobs to be created.

SKMigas' comment about the number of additional workers that will be employed follows from the unit's approval of 274 contractors' work plans and budgets last year, which it handed over to its headquarters Tuesday in Jakarta.

Of the 274 contractors, 74 are in the production phase such as Total E&P Indonesia in the South Mahakam block in East Kalimantan and ConocoPhillips in the Sumpal field in South Sumatra.

These 74 contractors are slated to invest around $23.5 billion this year, with the investment budget broken down as follows: $14.7 billion to production activities, $5 billion to development projects, $2.3 billion to exploration plans and $1.5 billion to general administration. The consolidated work plan includes the drilling of 1,200 developing wells, 1,100 work-over wells and 100 exploration wells.

SKMigas remarked in a statement Tuesday that it hopes to see the approved work plans being executed at once.

In the unit's disclosure, Indonesia's Energy and Mineral Resources Minister, Jero Wacik said: "We ask that all the contractors immediately implement their approved work plans, so that the target production and revenues can be achieved."

Meanwhile, an additional $2.7 billion is being set aside specifically for exploration projects. The funds, said SKMigas, will be used to drill 75 conventional oil and gas wells and 82 exploratory coal bed methane wells.

In total, SKMigas forecasted that the country will see $26.2 billion in oil and gas investments this year, as compared to $21.9 billion last year.

Dow Jones Newswires reported Monday that Indonesia's Finance Minister Agus Martowardojo confirmed that the country's oil production averaged 865,000 barrels of oil per day (bopd) last year. The government also missed its target in 2011, producing 898,000, well below its 945,000 bopd target.

Indonesia appears to have had more success on the natural gas front. According to a research report release by OSK Research Wednesday, the country's natural gas sector is a "clear success story." From negligible volumes in 1975, the country now produces 75.6 billion cubic meters of natural gas. It is the main supplier to the importing regions of Japan, South Korea and Singapore.

Local media reported Wednesday that the president will soon issue a decree to remove the "temporary" label from the description of SKMigas. The unit, since November last year, is bearing the description as a "temporary unit of the Ministry of Energy and Mineral Resources", after the Constitutional Court made a controversial ruling to annul several articles in the 2011 Oil and Gas Law, which effectively disbanded BPMigas.

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