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Pertamina's 'neglected' oil and gas blocks to get a re-do
State-owned oil and gas company Pertamina is vigorously campaigning to acquire oil and gas assets overseas, at the cost of its own dormant blocks at home, a top official has said
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State-owned oil and gas company Pertamina is vigorously campaigning to acquire oil and gas assets overseas, at the cost of its own dormant blocks at home, a top official has said.
Rudi Rubiandini, the head of upstream watchdog SKKMigas, said scores of oil and gas fields that belonged to Pertamina that had been 'neglected'.
Rudi, former deputy energy and mineral resources minister, said the regulator had given Pertamina 'the privilege' to form partnerships with third parties to develop those 'neglected' fields.
Those oil and gas fields under discussion are mostly located in Sumatra, such as Tanjung Tiga Barat field, Limau Barat field, Belimbing field and Limau Tengah field in South Sumatra, as well as Lirik field, North Pulai field and Sago field in Riau.
According to Pertamina upstream director Muhammad Husein, there would be 24 oil and gas fields that the firm would offer to major oil field service companies such as UK-based Petrofac and China-based Daqing Oilfield Company Ltd.
Daqing Company is well-known for successfully implementing the Enhanced Oil Recovery (EOR) program to the Daqing field in the Heilongjiang province in China, currently the nation's largest oil field.
'We hope that in the next couple of months we could sign agreements with those companies. Personally, I hope Pertamina can produce a total of 200,000 bpd [barrels per day] from the oil recovery program with those partners,' he said.
Currently, the 24 oil and gas fields in question cover around 20,000 bpd, or 20 percent of Pertamina's total output.
Despite possessing 40 percent of oil and gas concessions in Indonesia, Pertamina is currently the second-largest oil producer behind American giant Chevron and the third-largest gas producer behind France-based Total and British BP.
In total, Pertamina managed to record a high of 207,500 bpd of oil as of May this year, much higher than the 142,000 bpd it produced in 2007. The output, however, is still around 20 percent of Indonesia's total output or less than Chevron's production of 40 percent.
Most of the contribution to the increase came from the North West Java offshore (ONWJ) block it acquired from BP in 2009 and West Madura offshore (WMO) block in the waters of East Java it took over from South Korea's Kodeco in 2011. Both blocks were controlled by Pertamina through Pertamina Hulu Energi (PHE), its subsidiary formed after the enactment of the 2001 Oil and Gas Law, which manages the firm's assets that were acquired from other oil and gas firms.
The ONWJ block, of which Pertamina owns 58.28 percent stake through its arm Pertamina Hulu Energi (PHE), produces 38,000 bpd of oil as of May or higher than the 22,000 bpd it produced back in 2009 before the acquisition took place.
The WMO block, of which Pertamina owns an 80 percent stake with the remaining stake owned by Kodeco, has produced 20,000 bpd of oil as of May or more than double the 6,300 bpd of production recorded in January this year.
Another upstream arm of Pertamina, Pertamina EP, the largest contributor to the firm's output, however, is yet to meet expectations in the first five months of this year with production as of May reaching around 126,000 bpd of oil or 8 percent below target.
At the same time, Pertamina EP is also yet to meet the firm's gas output target with its production as of May only reaching 1,079 million meter standard cubic feet per day (mmscfd) or lower than the original target of 1,112 mmscfd.
Unlike PHE, which generally operates its blocks through partnerships with other oil and gas companies, Pertamina EP has owned and managed its mother company's existing blocks since 1957 single-handedly.
The blocks operated by Pertamina EP, however, are currently in a declining period due to aging oil and gas fields.
Under the leadership of Karen Agustiawan, who led the corporation since 2009, Pertamina is attempting to acquire overseas oil and gas assets in order to boost its own output much like the strategy from its Malaysian counterpart, Petronas.
Pertamina's campaign, however, has yet to meet expectations.
