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tate-owned oil and gas company Pertamina plans to boost output and become the biggest contributor to national oil production within the next five years. It is particularly eyeing a number of expiring blocks.

Pertamina president director Dwi Soetjipto said Tuesday that the company wanted to boost its contribution to national oil production from 23 to 50 percent.

'€œOne of our focuses is in developing the upstream sector because it is currently too low, we only contribute around 23 percent to national production. National oil companies in other countries make larger contributions,'€ Dwi said.

Last year, Pertamina recorded oil production of around 237,000 barrels of oil per day (bopd), of which about 194,000 bopd came from domestic oil fields. Last year, national oil production was 793,570 bopd.

Pertamina upstream director Syamsu Alam said that if the government decided to handover the operation of Mahakam block to Pertamina, the state company would be able to boost its contribution to around 40 percent of national production.

'€œWe will selectively request the rights to operate the expiring blocks that make major contributions to the national production. Regarding Mahakam, we are very keen to start operating there,'€ Syamsu said.

Mahakam block is currently controlled by Total E&P Indonesie. However, the contract will expire in 2017. The Energy and Mineral Resources Ministry said it wanted Pertamina to be the new operator for Mahakam. However, before a definitive decision is made, Pertamina has to submit proposals to the government concerning its plans to develop Mahakam so that the new operations would create the utmost benefit for the country.

Under the work plan and budget, Mahakam is expected to produce around 62,000 bopd of oil and 246,000 barrels of oil equivalent per day (boepd) in gas this year.

According to figures from the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), there are as many as 32 oil and gas blocks that are set to expire in 2024. The blocks'€™ combined production will reach 72.5 percent of the country'€™s current oil and gas output. Due to the size of production, concerns have been increasing over the fate of the expiring blocks.

The Energy and Mineral Resources Ministry recently revealed that Pertamina requested to be the operator of the South East Sumatra (SES) block, which is currently controlled by CNOOC SES Ltd. Its contract is set to expire in 2018.

In the high-risk oil and gas business, a firm decision about the continuation of operations is necessary as contractors need to calculate their investments. Failure to give certainty will slow down investment in the sector and in turn cause a decline in production.

Indonesia, a former member of the Organization of Petroleum Exporting Countries (OPEC), has been struggling to maintain its national oil output amid increasing demand, while supply is disrupted because the producing fields have been depleted.

Due to the rising demand, the country needs to import a huge amount of crude oil and petroleum products.

The Integrated Supply Chain (ISC), Pertamina'€™s unit in charge of procuring crude oil and petroleum products, said it planned to import a total of 300 million barrels of oil and associated products this year.

'€œTenders for crude oil procurement will be held every month because the crude price changes every second. Meanwhile, import of petroleum products are mostly at fixed volumes and terms, in which the supply has been fixed for a certain period,'€ ISC vice president Daniel Purba said, referring to a long-term importing contract.