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Indonesia says optimistic

about oil targets in '95

JAKARTA: Indonesia's state oil company Pertamina said it was optimistic that foreign oil contractors would achieve oil exploration targets in calendar 1995.

It added that more oil contracts would be signed this year.

"We are optimistic the plan that we have underlined for exploration targets this year can be achieved," Zuhdi Pane, Pertamina's head of the foreign contractors body, told reporters.

Pertamina has said it expects some 128 oil exploration wells to be dug in calendar 1995, compared with 126 in 1994.

Pane said foreign oil contractors planned to invest $3.7 billion in 1995, including $639 million for exploration.

He said oil contractors had invested $3.3 billion in 1994, including $503 million for exploration.

"According to the plan, foreign oil contractors will invest $3.7 billion this year. This figure is higher than 1994," he said.

Pane said he expects more oil contracts to be signed this year. "We have signed 13 oil contracts so far this year. I am convinced we will sign more than 15 oil contracts this year."

He said one technical assistance contract (TAC) is currently ready to be signed. Pertamina has concluded the negotiation for four TACs and three production sharing oil contracts.

He said Pertamina is negotiating four TACs, one enhance oil recovery contract, and five extention contracts.

Pane said Pertamina has currently opened 13 areas, including three in eastern Indonesia, for oil contractors.

Indonesia in January 1994 announced new incentives for exploration in remote and high-risk areas, including Irian Jaya, the western half of New Guinea island.

The main incentive is an immediate rise to 35 percent from 20 percent in the oil output split that is granted to contractors working in frontier areas.

But foreign oil contractors have said the incentive was not enough to encourage them to invest in remote areas, and have instead proposed tax consolidation to encourage exploration in new oil fields.

The government has rejected the idea, saying tax consolidation would reduce its income.-Reuter