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Show Murban and Oman crudes - which together accounted for 17.4 per cent of Japan's crude imports in 1969-and possibly the introduction of West African crudes. A further lowering of sulphur content after 1973 might require the restriction of incremental crude imports entirely to those of low-sulphur content - and at this stage the availability of these from Alaska or elsewhere has still to be determined. The second and third measures call for a reduction in the sulphur content of fuel oil as such. Imports of fuel oil should be further weighted in favour of low-sulphur types; but the promotion of desulphurization technology at refineries is far more important. Twelve such units are already operating, with a combined capacity of about 290 000 b/d, and by end-1973 capacity is expected to reach 650 000 b/d. Japan's use of fuel oil for industrial and power purposes is put at 146 million kilolitres for 1973, equivalent to 2.5 million barrels daily. Fourthly, flue gas desulphurization, already under study by the electric power industry, should be brought into operation at an early stage; but the need after 1973 will vary according to the availability of low-sulphur fuels. Fifthly, direct burning of crude oil should be taken into account as an alternative fuel for power stations; its use in this way - which had already reached 4 million kilolitres in 1969 - might be greatly expanded, but this should not be allowed to upset the refinery output balance as between fuel oil and other products. v Other recommendations made by the Committee are for the increased use of imported L N G , and the introduction of community heating/ventilation systems based on town gas. INDONESIA Oil and Gas Plans Indonesia would have to raise its crude oil production to four million barrels a day by 1985, or to more than 1 400 million barrels a year, if its crude exports to Japan, the United States and South-East Asian countries are to maintain present market shares. This was disclosed by Perta-mina's president director (Dr Ibnu Sutowo) who added that oil output in fiscal 1969-70 would total 293 million barrels. Under the current Five-Year Plan a cmde output target of 358 million barrels has been set for 1970-71 and 440 million barrels for 1973-74. Domestic consumption in the same period is expected to rise from 40 million to 52 million barrels a year. Indonesia's oil reserves are currently put at 18 000 million barrels. Dr Sutowo said that Indonesia had shown its ability to raise its oil output. However, the steady increase needed would depend on the present "gamble" in offshore exploration. H e pointed to the confidence shown by foreign contractors now operating in Indonesia. According to the original budget of the foreign contractors $US 23 million was to be spent on offshore exploration in 1969, but their actual expenses that year were 8 U S 68 million. T o increase production to three million barrels a day (more than double the 1973-74 target figure) $ U S 1 000 million to S U S 1 500 million would be needed. According to the Mining Minister (Prof Sumantri Brodjonegoro) Indonesia has not yet been able to exploit efficiently its natural gas resources because the exploitation needs tens of thousands of U S dollars in investments. However, cilorts would be made soon to use natural gas for chemical processing and as domestic fuel. More Search Contracts Pertamina has concluded more production-sharing contracts for petroleum exploration on offshore as well as onshore tracts. The new contracts stipulate the now common obligations, such as payments for gco-data on signing, production bonuses at varying levels, the 65 to 67.5 per cent profits split in Pertamina's favour - based on realized prices - and crude supply to the domestic market at cost plus 20 U S cents per barrel (see Petroleum Press Service, August 1969, page 291). Relinquishing parts of the contract areas after a certain number of years is also provided for. Winners of the new contracts are British Petroleum, which received a block of 9 300 square miles off Northeast Kalimantan, Texaco-Chevron (27 800 square miles between Java and Southwest Sulawesi), Hartog Oil of Australia (28 600 square miles off the south coast of West Irian), and Dr Wendell Phillips (12 352 square miles onshore and ^offshore northeastern West Irian). ~"DT Wendell "PTnllips, archaeologist and explorer, is the! first individual to have successfully tendered for a contract area in Indonesia. H e said at a press conference in London that he had committed himself to spending $ U S 17.5 million over the next eight years, but that he would be bringing in other companies. The contract area had been Shell's and three shallow test wells, drilled between 1956 and 1959, had given encouraging signs of oil. Dr Phillips has not committed himself to any downstream investments, but he will consider building a hospital, school and social welfare centre in West Irian if production reaches 75 000 b/d. His entry into petroleum came in 1953 when the Sultan of O m a n offered him the oil concession for Dhofar, a dependency about the size of Ohio. D r Phillips sold a portion of these rights for more than a million dollars and has since also acquired concessions in other countries, such as Libya, Venezuela and now Indonesia. IRAQ INOC's Export Plans Iraq continues to make plans for the future of North Rumaila. Most far-reaching is the intention now announced of building a 1 250-kilometre 48-inch pipeline to take the crude oil to a port on the Mediterranean. Preliminary estimates put the cost at S420 million for a capacity of 50 million tons a year, but the project is only at the earliest stage, with the allocation of funds to the Iraqi National Oil Company to make studies and draw up specifications. Initial exports from North Rumaila, due in 1972, will be made from the southern Iraq port of Fao. But capacity and access here is very limited, and the second stage of the field's development, which will provide for expansion of production from five million tons a year to 18 million tons, would necessitate some other outlet. It appears that a pipeline to the Mediterranean has been preferred to the alternative of constructing a new deep-water terminal on the Persian Gulf. In addition to North Rumaila oil, I N O C will hope to Petroleum Press Service March 1970 107 |