Pertamina teams up with Petronas, PetroVietnam

The Jakarta Post , Jakarta | Fri, 08/10/2007 1:02 PM | Business

The Jakarta Post, Jakarta

Indonesia's state-owned oil and gas firm Pertamina, Malaysia's state oil firm Petronas and Vietnam's state oil firm PetroVietnam signed a contract Thursday to jointly explore and develop oil and gas reserves in the Randugunting block, East Java.

Witnessed by Vietnamese Prime Minister Nguyen Tan Dung and Indonesian Energy Minister Purnomo Yusgiantoro, the signing of the contract paves the way for the three oil firms to invest US$7.6 million in the block over the first three years.

The Indonesian government will receive $500,000 as a signature bonus under the agreement.

Under the production sharing scheme (PSC), the three developers will get 15 percent of the oil production while the government will be entitled to the remaining 85 percent.

Of that 15 percent, Pertamina owns a 40 percent participating interest, with the Malaysian and Vietnamese firms each being entitled to a 30 percent stake.

The split for gas production, meanwhile, will be 60 percent for the Indonesian government and 40 percent for the three-firm contractor.

The Randugunting block is estimated to have a capacity of 190 million barrels of oil.

The three companies have agreed to jointly explore oil and gas blocks in their respective countries as a manifestation of economic cooperation within the 10-member Association of Southeast Asian Nations.

They had earlier signed agreements to explore and develop hydrocarbon resources in Block 10/11.1 in offshore Vietnam and Block SK 305 in offshore Sarawak, Malaysia.

The Vietnamese agreement was signed in 2002, while the Malaysian deal was inked in June 2003. (11)

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