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T Pertamina will take over South Korean company Kodeco Energy as the operator of the West Madura Block in 2011, the company said Tuesday.

The West Madura oil and gas block is located in the Java Sea and produces around 21,000 barrels of oil per day (bopd). Pertamina currently holds 50 percent working stake in the block, while Kodeco and China’s National Offshore Oil Corp. (CNOOC) control a 25 percent stake each.

Despite Pertamina’s majority interest, Kodeco currently acts as the block operator, a role which Pertamina will take over after it secures an extension of its contract of work (due to expire in 2011) with the Indonesian government.

Under the new contract, Kodeco and CNOOC have agreed to transfer an additional 10 percent stake to Pertamina, Pertamina spokesman Mochamad Harun said.

“Pertamina will hold a 60 percent stake in the block and will become the operator,” he said.

“The board of directors has asked Pertamina EP to prepare its resources to become the executive operator,” Harun added, referring to Pertamina’s subsidiary operating in the upstream oil and gas business.

Pertamina is upbeat on acquiring upstream assets to enable the company to boost its oil and gas production from its current level of around 432,000 bopd to 700,000 bopd by 2014. The company earlier said it would allocate Rp 10.1 trillion (US$1.1 billion) to oil and gas block acquisition in 2010.

Pertamina is also currently in talks with Total E&P Indonesie (a subsidiary of France’s Total S.A.) and the operator of the gas-rich Mahakam block in East Kalimantan, as Total’s contract for the block is due to expire in 2017.

“Pertamina will definitely get into the block when the contract is extended in 2017. The share composition is still being negotiated with Total,” Harun said.

Pertamina recently acquired an onshore and an offshore oil and gas block from a foreign company, but no Pertamina officials have disclosed details to The Jakarta Post about either of the acquisitions.

Meanwhile, Pertamina finance director Afdal Bahaudin confirmed an earlier report on the company’s profits for this year, which may miss an initial target. Afdal said Pertamina estimated it would book between Rp 15 trillion and Rp 17 trillion in profits this year, far less than its initial target of Rp 25.4 trillion.

Afdal said the reduced realization was a result of losses from the distribution of subsidized fuels and the annulled plan to increase the price of 12 kg LPG canisters.

“Subsidized fuels and LPG contributed around Rp 5 trillion to potential losses in profit,” he said.