Chinese energy firms to invest $14 bln in Indonesia's oil and gas sectors

A senior Indonesian energy and mining official revealed last week that Chinese oil giants plan to invest as much as $14 billion in the southeast Asian country's oil and gas exploration sectors, state media reported last Friday.

Chinese investment interest in the country has arisen alongside increased interest from South Korea, Waryono Karno, the secretary-general of Indonesia's Ministry of Energy and Mineral Resources, told China Newswire. As revealed during Indonesian President Susilo Yudhoyono's recent visit to South Korea, South Korean energy firms plan to spend $8.5 billion in Indonesia's oil and gas sectors.

In addition to oil and gas, investment from the Chinese energy consortium, which includes the China Petroleum & Chemical Corp. (Sinopec), the China National Petroleum Corp., the China National Offshore Corp. (CNOOC) and Sinochem Corp., will also target the rich coal-bed methane resources of East Kalimantan.

The official said that Japan, China and South Korea are currently leading investment in the country's energy-related sectors, and that India's interest in the country is mounting. Out of all non-Asian countries, the United States is the largest investor in Indonesia's energy-related sectors.

The official added that during the first half of the year, Indonesia attracted around $27.8 billion in oil and gas exploration and development investment.

Indonesia has approximately 188 trillion cubic feet of proven natural gas reserves and has emerged as one of the world's largest exporters of liquefied natural gas (LNG) amid strong demand for the cleaner fuel, especially from China.

The country will transport 2.6 million tons of LNG a year for a period of 25 years to China's southeastern Fujian terminal beginning in 2007. The operator of the Fujian terminal, CNOOC, also holds a 16.96 percent stake in the project that supplies the gas for the terminal, the Tangguh LNG project.

PetroChina, the listed arm of CNPC, also holds stakes in at least six oilfields in the country.