Pertamina's Worket at Offshore Project - Photo by PIEP

JAKARTA (TheInsiderStories) – After more than a year of negotiations,The largest energy producer in Indonesia PT Pertamina expects to complete its acquisition of an operating interest in Iran’s Mansouri oilfield in May. With its finances in better order, the state-owned firm is also venturing further offshore.

Pertamina will have a 30 per cent interest in the field, with another 20 per cent to be held by an Iranian partner, and the remainder to be allocated for other potential partners.The block is expected to produce about 300,000 barrels oil per day (bpd).

The company had officially submitted a proposal on two Iranian development fields Ab-Teymour and Mansouri oilfield to the National Iranian Oil Company earlier this year. Both fields have been expected to contain reserves of more than five million barrels.

Beside looking Iran, in late 2017, the Jakarta-based national oil company signed a memorandum of understanding with Algeria’s state-owned Sonatrach. The government is seeking to produce liquefied petroleum gas (LPG) in Algeria amid Indonesia’s increasing domestic demand and limited production of the commodity.

Previously, Deputy Energy and Mineral Resources Minister Arcandra Tahar said Pertamina’s assets in Algeria contained LPG, also known as propane and butane. Through a business-to-business approach, Pertamina is also currently looking to buy LPG directly from Algerian state energy firm Sonatrach.

Last year, both parties has signed the Memorandum of Understanding on oil and gas block in Algeria. The two companies will cooperate to produce oil and gas a number of blocks in Algeria.

This new agreement, Manik said, will give an opportunity for Pertamina to explore new oil and gas potential in Algeria, includes the development of existing assets as well as the development of new assets with potential production of up to 30,000 bpd with a total reserve of more than 100 million barrels of oil.

At present, Pertamina through its subsidiary PT Pertamina Internasional EP (PIEP), has participating interests at three oil and gas fields in Algeria, namely at the MLN field with a 65 percent interest, the EMK field with 16.9 percent and the OHD field with 3.73 percent.

With this MoU will also open an opportunity for both companies to explore new businesses–upstream and downstream–including working on the potential of LNG and LPG.

In August of 2017, Pertamina completed the acquisition of 24.5 per cent stake in French oil and gas company Maurel et Prom. Pertamina, currently, is exploring to operate and get into Maurel et Prom’s block management.

Maurel has control over several blocks that are already producing and exploring. The blocks are located in a number of countries, including Canada, France, Italy, Myanmar, Namibia, Colombia, and Gabon.

In November 2017, Pertamina through its subsidiary PT Kilang Pertamina Internasional and Russia’s Oil & Gas company, Rosneft Oil Company through its affiliate Petrol Complex Pte. Ltd., have signed the Deed of Establishment of the joint venture company named PT Pertamina Rosneft Pengolahan dan Petrokimia, that will develop and operate the New Grass Root Refinery and Petrochemical Complex in Tuban, East Java.

Pertamina and Rosneft have agreed on the composition of the Joint Venture Company, in which Pertamina and Rosneft own 55 percent and 45 percent respectively of the total share. Refinery Tuban is planned to have 300,000 barrels of crude processing capacity.

Pertamina estimated that its total LPG sales would soar to more than 7.5 million metric tons this year, up from an estimated figure of 7.2 million metric tons last year. About 60 percent of this year’s figure will be met through imports.

Recently the company announced will spend US$3.24 billion on its upstream business in 2018—a 21 percent rise from a year earlier. Most of the upstream budget will be invested in domestic fields, notably in the Mahakam block in East Kalimantan, which Pertamina has bought from French’s Total EP and Japan’s Inpex Ltd, as well as in the Jambaran gasfield after acquiring ExxonMobil’s 41.4 percent stake in 2017.

Email: linda.silaen@theinsiderstories.com

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The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.

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