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Pertamina in talks with Oman on ventures
State-owned oil and gas firm PT Pertamina is in negotiations with Oman officials for the takeover of oil and gas assets in the Gulf state, expecting to seal an agreement by yearâs end
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tate-owned oil and gas firm PT Pertamina is in negotiations with Oman officials for the takeover of oil and gas assets in the Gulf state, expecting to seal an agreement by year's end.
Pertamina president director Karen Agustiawan, however, refused to provide details on the ongoing talks.
'I am not allowed to disclose details before we sign the SPA [shares purchase agreement],' she told reporters at the Jakarta Convention Center in Senayan.
Karen revealed Pertamina's plan in her speech before attendees of the 37th Indonesian Petroleum Association (IPA) conference ' including visiting Oman Oil and Gas Minister Mohammed Hamad Al Rumhy.
With current oil output reaching around 200,000 barrels per day (bpd), Pertamina is presently the second-largest oil producer in Indonesia behind US giant Chevron,which has an output of more than 300,000 bpd.
Pertamina has attempted to buy oil and gas blocks overseas in the past to boost oil output but none of its major plans have panned out thus far.
In February, Pertamina failed to acquire a 32 percent stake in Venezuela's Petrodelta from New York-listed Harvest after the Indonesian government dropped the move following a disagreement over an investment deal.
Last year, Pertamina also planned to buy a stake in Canada-based Coastal Energy, which has assets in several regions in Southeast Asia. Pertamina ultimately withdrew the plan following a disagreement over the purchasing price.
Separately, Al Rumhy said he was still in the dark over Pertamina's plan to acquire assets in Oman but said his country was open to foreign oil and gas company operations.
In addition, he said Oman policy allowed foreign firms to receive oil entitlement although shares would differ from one contractor to another.
'The typical agreement is called a production-sharing agreement where the investor gets a certain portion of profits in the form of actual oil. There are many examples of that,' he said.
Oman, located in the Persian Gulf, is home to about 3 million people and while oil is the core of its economy, Oman is a modest oil producer compared to its neighbors. Oman's average oil production including condensates in 2012 was 918,000 bpd, up 4 percent from its average oil production of 884,900 bpd in 2011.
In comparison, Indonesia, which currently produces about 830,000 bpd, is home to 240 million people.
Meanwhile, the country's publicly listed PT Medco Energy Internasional is also planning to expand its presence in Oman. Currently in Oman, Medco operates its wholly owned Medco Oman LLC, which holds a 55 percent participating interest in Karim Small Fields.
In 2012, Medco increased oil production in Karim ' owned by a joint venture between Oman-owned Petroleum Development Oman (PDO) and Royal Dutch Shell ' to 22,400 bpd, a significant increase from the 9,000 bpd the field produced back in 2006 before Medco received the contract.
Medco president director Lukman Mahfoedz, currently the IPA chairman, confirmed he discussed Medco's expansion plans with Minister Al Rumhy on the sidelines of the IPA convention.
'God willing, we can announce the deal this year,' he said.
Minister Al Rumhy said that Medco was indeed in negotiations to take more assets in Oman, citing that the assets would likely be located in Oman's Block 56 or Block 51.
Shares in Medco, which is listed in Jakarta as 'MEDC', closed at Rp 2,100 on Thursday, increasing 3.7 percent from a day earlier.
