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The Jakarta Post
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Your letters: Pertamina’s acquisition of Petrodelta

  • The Jakarta Post

| Fri, January 25 2013 | 12:31 pm

I refer to the article titled “Pertamina’s acquisition of Petrodelta stake on hold,” (The Jakarta Post, Jan. 17, p. 13).

This deal will not be on hold much longer given the recent hostage situation in Algeria. The nation, thought to have been safe, turned out to be unsafe. Meanwhile, another major oil-producing nation, Venezuela, the owner of Petrodelta, continues its euphoria for President Hugo Chavez, as demonstrated by the overwhelming win recorded by Chavez’s supporters in regional elections two weeks ago and the massive turnout for his ersatz inauguration several days ago.

While Pertamina considers acquiring Petrodelta, it might also consider buying Harvest, which holds the Venezuelan government’s stake in Petrodelta.

Pertamina has been keen to buy a stake in Petrodelta, whose reserves have been selling for little over half what they would go for anywhere else outside Venezuela.

Due to incessant propaganda from the US and UK, Venezuelan assets are now as cheap as those in, say, North Korea, Iran, or Somalia — and much cheaper than those in truly dangerous countries such as Libya, Nigeria and now Algeria.

Harvest’s excellent prospects in Gabon have been recognized. Pertamina could easily form a consortium to drill HNR’s concessions in Gabon properties with other major oil companies.

Harvest also has promising concessions in Indonesia. However, its ace in the hole is a large block in the South China Sea that abuts Talisman’s block, which Pertamina has on its “to buy” list. Note that HNR’s South China Sea block is valued on its balance sheet at just about zero!

With a lowball bid of US$22 or $23 a share, Pertamina could acquire all of Harvest, Petrodelta, the firms concessions in Gabon, Indonesia and Oman — and a potentially valuable South China Sea block — for about half what it plans to spend in Algeria.

Pertamina could keep Harvest’s Houston office as its western hemisphere headquarters, thus improving its access to Western capital and assistance.

Pertamina might also retain many of Harvest’s extremely experienced staff of managers and project directors to assist on Petrodelta and other projects.

It appears that Hugo Chavez will soon return to Venezuela, where he will need the help of his vice president, Nicolás Maduro, and Elías José Jaua, his foreign minister.

This is good news for opening up Venezuela’s energy sector, given recent deals involving international players such as Pemex, Petronas, Eni, Rosneft, ONGC, and several major Chinese companies.

Ellen Brandt


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