BANGKOK, May 16 (Reuters) - Indonesia expects

investments in its oil and gas sector to rise 29% in 2024, the

chairman of regulator SKK Migas told Reuters, as it races to

ramp up drilling and exploration following the recent exits of

global giants Shell and Chevron ( CVX ).

An immediate push in oil and gas investments is crucial for

the resource-rich southeast Asian nation, which is looking to

reverse a protracted output decline amid increasing financing

challenges for fossil fuel projects.

Of the planned investments this year, 40% will come from

foreign companies including Eni, Exxon Mobil ( XOM )

and BP, Dwi Soetjipto, chairman of oil and gas regulator

SKK Migas told Reuters on the sidelines of the Future Energy

Asia conference late on Wednesday.

The investments will also be used to boost exploration and

drilling, Soetjipto said. The expected growth in 2024 oil and

gas investments, which will take them to $17 billion, is more

than double the 13% expansion witnessed in 2023.

"We will increase drilling from last year, when we drilled

790 wells. This year, we are planning about 930 wells," he said,

adding that exploration spending will be increased to $1.4

billion from $0.9 billion last year.

The spending on exploration will include staggered

investments into projects that will begin production later this

decade, he said.

Soetjipto said decarbonisation requirements for fossil fuel

projects were a major challenge, as most of the investment

funding was coming from foreign banks and there was no immediate

pathway for consistent returns on investments in carbon capture.

The Indonesian government is keen to reverse the trend and

targets an increase in lifting to one million barrels of oil and

12 billion standard cubic feet per day of gas by 2030.

"The requirements for financing and also from the

international companies is that they have to fulfil the green

targets. It means that their capex can increase without any

(monetary) benefit from a carbon capture in the future," he

said.

LOWER OIL, GAS LIFTING

Soetjipto forecast slightly lower annual oil lifting volumes

of about 600,000 barrels per day (bpd) in 2024, compared with

605,000 bpd last year. Still, that was higher than the earlier

SKK Migas forecast of 596,000 bpd.

However, he expects 2024 natural gas lifting to be nearly 8%

higher at about 5,700 million standard cubic feet per day

(mmscfd), above the 5,300 mmscfd seen in 2023 and an earlier

2024 forecast of 5,544 mmscfd based on contractors' work plans.

The development of new gas projects in Indonesia has faced

delays due to shareholder changes in projects, the COVID-19

pandemic and adjustments to adopt carbon capture technology.

The improved natural gas output forecast was due to new

projects that had started production recently, he said, adding

that a final investment decision in the delayed Geng North field

is expected "in the middle of this year".