In its latest move to expand its upstream business, state oil and gas company PT Pertamina plans to secure a bigger stake in the West Madura block, East Java, with the aim of acquiring greater authority in the management of the block.

With its current 50 percent holding, Pertamina already holds the largest single interest in the block.

But according to Pertamina corporate vice president for upstream Karen Agustiawan, the stake was deemed not enough for the company to control the management of the block.

"With a 50 percent stake, Pertamina can still be voted out during a vote," Karen said on Wednesday.

She said the West Madura block produces about 6,500 barrels of oil per day and 45 million cubic feet gas per day (mmcfsd).

South Korea's Kodeco Energy and China's National Offshore Oil Corp. (CNOOC) each control a 25 percent stake in the block.

With a bigger stake in its hands, Pertamina plans to function as operator for the block, which is currently run by Kodeco, according to Karen.

"We have proposed to become the block operator, but they (Kodeco) refuse. We have not decided on this matter yet," she said.

Kodeco shareholder representative Sung Sik Min said Kodeco was open for negotiation with Pertamina and CNOOC over the operatorship.

"We are ready to talk with them," he said.

Sung said the West Madura production sharing contract needed to be extended as it would expire by May 6, 2011.

Pertamina earlier also sought a bigger interest in Total's Mahakam block in East Kalimantan, in Inpex's Masela offshore block in Timor Sea, and in Chevron's deep-water fields off East Kalimantan.

Karen said Pertamina had prepared a budget for its acquisition program next year, but refused to disclose the amount. -- JP/Alfian

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