Pertamina Allocates More Capex to Develop Geothermal Energy
25 April 2014 14:18 WIB
TEMPO.CO, Jakarta - Pertamina Geothermal Energy (PGE), a subsidiary of state-owned oil and gas company Pertamina, will increase capital expenditure on engineering and construction this year despite waiting on licenses to begin drilling operation from the government.
PGE has allocated US$312 million (Rp 3.6 trillion) of capital expenditure, 25 percent higher compared to the amount allocated last year.
PGE director Roni Gunawan, said that the money would spend to develop 16 wells and one exploration well. He said that drilling costs vary between US$7 to 12 million per well.
"Last year's capital expenditure was relatively low because we were waiting for licensing," he said on Thursday, April 24, 2014.
PGE was faced with licensing issues because many of the wells are located in protected forest and conservation areas, in which licensing can take up to two years.
Roni said that there are various ways to overcome this obstacle. "A license for 800-square-meter [drilling] area in Kamojang, West Java, has not been issued yet. We ended up trying to conduct oblique drilling. It's difficult, but I hope it's successful," he said.
BERNADETTE CHRISTINA MUNTHE
