Pertamina Seeks 430,000 bpd From Iraq to Make Up for Declining Reserves
As Indonesia’s oil reserves dwindle, state oil and gas company Pertamina is moving to acquire petroleum fields in Iraq that would allow the company to bring home at least 430,000 barrels per day.
Pertamina wants to buy stakes in five oil and gas blocks in the war-ravaged country that is struggling to overcome decades of war, occupation and sectarian strife.
Pertamina identified two fields having a production capacity of 1.8 million bpd, another two with 1.2 million bpd and a fourth with a 2.5 million bpd capacity.
“We are targeting to acquire at least 10 percent of the two out of five fields,” Pertamina’s president director Karen Agustiawan said on Wednesday.
She said the five fields were currently controlled by US and European oil giants such as Exxon Mobil, BP, Shell and ENI. “The acquisitions are currently being negotiated with a business-to-business approach,” she said.
She claimed that Iraqi Deputy Prime Minister for Energy Hussain al-Shahristani supported Pertamina’s plans.
Shahristani met with Energy and Mineral Resources Minister Jero Wacik and other Indonesian officials on Wednesday, discussing plans to boost Indonesia’s oil imports from Iraq.
Karen also revealed that Pertamina had acquired a permit to resume its exploration in Iraq’s Western Desert III block that was halted due to the 2003 war.
“Its reserves were estimated at 3 billion barrels,” she added.
Karen said that Pertamina had set aside Rp 10 trillion ($1.1 billion) to support its expansion plans. “If our acquisition goes according to plan, then the nation’s energy security will improve,” she said.
Last week, Pertamina announced a plan to purchase assets of an oil company in Venezuela from Houston-based Harvest Natural Resources for $725 million.
Many Indonesian oil field reserves are declining, and aging equipment has made operations less efficient. According to global oil giant BP’s annual report on oil and gas, Indonesia’s proven oil reserves have fallen by 1.9 billion barrels since 1991, faster than the rate of any other Asian country.
Indonesia set its oil production target at 930,000 bpd in the state budget this year. The nation’s oil output reached 903,000 bpd last year, less than the 945,000 bpd set in the state budget. Oil production hit a peak of 1.6 million barrels per day in 1995. Indonesia lost its OPEC membership in 2008.