I

ndonesia'€™s state-owned oil and gas company PT Pertamina bought Canada'€™s Talisman Energy'€™s participating interest in the offshore North West Java (ONWJ) block in a transaction worth US$40 million.

Ignatius Tenny Wibowo, the president director of Pertamina Hulu Energi (PHE), the upstream subsidiary of Pertamina, said on Friday that the Jakarta-based energy firm had purchased Talisman'€™s 5.03 percent interest in the 8,300-square-kilometer block, which spans from the north of Cirebon, West Java, to Thousand Islands, Jakarta.

In November last year, Pertamina signed the shares purchase agreement (SPA) with Talisman at the latter'€™s headquarters but the finalization of the transaction was only made public on Thursday after the Energy and Mineral Resources Ministry'€™s approved the business deal.

With the transaction, Pertamina currently owns a 58.28 percent participating interest through PHE, which is also the operator of the block.

Pertamina'€™s current partners in the ONWJ include PT Energi Mega Persada, a publicly listed oil and gas company within the Bakrie Group (36.72 percent interest at the block) and Singapore-based energy
investment company Risco Energy (5 percent).

Energi Mega Persada, through its subsidiary EMP International Ltd., purchased its stake from China'€™s CNOOC in 2011 in a transaction valued at $212 million.

In June 2009, Pertamina bought 100 percent stake in BP West Java Ltd., the subsidiary of UK-based oil and gas giant BP plc in an acquisition reported to be worth $280 million. With the acquisition, Pertamina holds participating interest at the ONWJ block as well as its operatorship.

In 2011, Pertamina bought 7.25 percent participating interest at the block that previously belonged to Japan-based firm Inpex'€™s through its local subsidiary Inpex Java Ltd.

Separately, PHE ONWJ subsurface manager Achmad Zailani told a press briefing in Jakarta the average daily crude oil output from the offshore block reached 38,000 barrel per day (bpd) as of May this year or 16 percent above ONWJ'€™s average daily output throughout last year.

'€œCurrently, PHE ONWJ is the fourth largest crude oil producer in Indonesia, behind [US-based] Chevron Pacific Indonesia, Pertamina EP [another upstream arm of Pertamina], and [France-based] Total E&P Indonesie,'€ said Achmad.

'€œOn May 1, production reached 42,200 bpd, which is the highest daily production of the last 10 years,'€ he said.

Oil output currently, he added, was almost double that of 2009 '€” 23,100 bpd of crude oil '€”when Pertamina first took over the operatorship of the ONWJ block from BP plc; the ONWJ operator from 2000 to 2009.

Under the operatorship of American company Atlantic Richfield (ARCO), which was the ONWJ operator from 1971 to 2000, the block reached its highest level of average daily production of 175,000 bpd in 1984.

This year, Achmad said, PHE ONWJ would spend a total of $1.02 million of capital and operation expenditure to develop the block. This amount is slightly above the 2012 figure of $772 million.