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Pertamina edging toward minority stake in Iraq
PT Pertamina is one step closer to purchasing a 10 percent stake in one of the largest oil fields in Iraq, with talks underway between it and the oil field operator
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T Pertamina is one step closer to purchasing a 10 percent stake in one of the largest oil fields in Iraq, with talks underway between it and the oil field operator.
Pertamina investment planning and risk-management director Afdal Bahaudin confirmed on Friday that the state oil and gas firm was currently waiting for American oil and gas giant ExxonMobil to decide on its 60 percent stake at the giant West Qurna-1 oil block.
However, the executive declined to provide details regarding the discussions.
'The decision over the stakes is in the hands of the seller and its process is bound by a non-disclosure agreement,' he said.
The various set-ups for farming out Exxon's stake at the onshore oil field is still pending a final decision, but PetroChina is likely to get 25 percent and Pertamina 10 percent, sources told Reuters on Thursday.
If the transaction over the US$50 billion project proceeds as planned, Exxon will have a 25 percent stake at the block and remain as an operator, while PetroChina gets 25 percent, Iraq's national oil company 25 percent, Royal Dutch Shell 15 percent and Pertamina 10 percent.
Last year, ExxonMobil offered to sell its stake in the oil field following disagreements with the Iraqi government over contracts the company signed with semi-autonomous Kurdistan in the north.
In March, Indonesia's Coordinating Economic Minister Hatta Rajasa visited Baghdad with a delegation including Deputy Energy and Mineral Resources Minister Susilo Siswoutomo and Pertamina CEO Karen Agustiawan.
Hatta said that during the visit, Pertamina got the 'green light' from the Iraqi government to enter the oil project.
Pertamina, which is also eyeing assets of US-based ConocoPhillips in Algeria, will record the biggest amount of foreign assets it has obtained to date should the transaction in Iraq go as planned.
The oil field, which currently produces around 500,000 barrels per day (bpd), may yield 1.8 million tons of crude oil when it reaches peak production. As a result, Pertamina could harvest 180,000 bpd in the future with only a 10 percent stake.
Pertamina, a former member and at one point the sole Southeast Asian representative in the Organization of the Petroleum Exporting Countries (OPEC), is the second-largest oil producer in the country behind US-based Chevron despite having the largest working areas.
Pertamina now pumps 197,000 bpd of crude oil according to the firm's data in the first half of the year, far behind Chevron, whose 300,000 bpd output covers 40 percent of Indonesia's national oil production.
Pertamina's Karen in an interview with The Jakarta Post in June said the firm aimed to contribute at least 50 percent to Indonesia's oil production 'through cooperation with major partners' by 2018.
