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tate-run energy company Pertamina announced on Monday it will acquire a 24.5 percent stake in France’s second biggest oil company Maurel & Prom (M&P) for US$200 million, part of a greater deal to fully own the company in a $1 billion deal.

Pertamina will take over all shares owned in the company by a company called Pacifico, which is owned by M&P chairman and chief executive Jean-Francois Henim.

Through the agreement, Pertamina will have the right to leverage around 6,000 barrels of oil equivalent per day (boepd) produced by Maurel & Prom, which carries out most of its business through the exploitation of onshore assets in three countries in Africa: Gabon, Tanzania and Nigeria.

Pertamina president director Dwi Soetjipto said the purchase agreement had come into force on July 31 and he expected the process to be completed by the end of August, subject to regulatory approvals from relevant authorities.

Dwi said the move was aimed at ensuring the country’s energy sovereignty, as the country was currently lacking in domestic oil reserves. Maurel & Prom’s proved and probable oil reserves totaled 205 million barrels by the end of last year, 78 percent of which were located in Gabon and 22 percent of which were found in Tanzania.

Maurel & Prom also holds a 21.37 percent stake in Seplat Petroleum, one of the leading local operators in Nigeria with a production of 43,400 barrels per day in 2015.

Dwi said the agreement was also a part of Pertamina’s commitment to expanding its overseas business.

“The agreement is one of the first steps for Pertamina to become a global player in the upstream sector,” Dwi told a press conference at Pertamina’s headquarters in Central Jakarta.

Pertamina is also hoping to acquire full ownership of Maurel & Prom, a move that would enable the former to benefit from all of the latter’s oil production for domestic consumption. Maurel & Prom’s production was estimated to be 30,000 barrels per day in 2016.

Pertamina senior vice president for upstream business development Denie Tampubolon said the full acquisition of Maurel & Prom was expected to be completed in December, as it needed to take several steps before purchasing a 100 percent stake in the French company.

Pertamina plans to start negotiations to gain full ownership of Maurel & Prom in September after completing the first agreement in August. The first move is to seek an agreement with investors who own the remaining 75.47 percent stake in the company.

Pertamina has conducted what Denie called “thorough research” aimed at gaining an understanding of the company’s assets and the suitability of the oil produced by the company.

“Maurel & Prom’s oil produced in Nigeria and Gabon is suitable to be processed in refineries in Indonesia,” Denie said.

Maurel & Prom, according to its financial report obtained from its website, has felt the pinch of the drop in oil prices in the first half of the year. The company’s consolidated sales plummeted to 142 million euros, compared to 158 million euros during the same period of last year. (mos)