JAKARTA (rambuenergy.com) – Total E&P Indonesie, a subsidiary of French giant oil and gas company Total S.A. has decided to cut its investment in Mahakam Block in 2016 to $1.1 billion, compared to US$1.9 billion this year due to falling oil and gas prices.
The decision was made ahead of the expiration of its contract to operate the block at end 2017. However, Senior Vice President Asia Pacific Total Olivier de Langavant highlighted that the slash of investment was due to lower oil and gas price and nothing to do with the contract term.
In 2015, Total has cut its investment to US$1.9 billion from initial plan of US$2.3-2.4 billion.
He said the company has stopped spending huge amount of money in certain areas as the oil price has fallen below $40 per barrel while gas dropped to around US$15 per million british thermal unit (mmbtu).
Ho noted that most wells in Mahakam are ageing, therefore it requires large amount of investment to increase gas as well as oil production. (*)