I

ndonesia is eager to grab operating shares of two of Iran’s oil fields in order to make up for the archipelago’s drastically depleting reserves. Realizing the ambition, however, may not be easy.

During a meeting to follow up on his recent visit to Iran, President Joko “Jokowi” Widodo emphasized the importance of being awarded operating contracts for the Ab-Teymour and Mansouri fields amid fierce competition from other oil and gas companies abroad.

“I hope that our team here can swiftly start preparations, so that the operatorship of these two oil fields can be handed over to Indonesia when we meet again with Iran in January,” he said on Thursday.

Indonesia has been eyeing Iranian oil ever since international sanctions against the Middle Eastern country were lifted in January, in exchange for disabling much of its nuclear infrastructure.

A recent report by the International Energy Agency (IEA) shows that Iran’s production has risen to 3.56 million barrels of oil per day (bopd) since then.

The last time Iran achieved such crude oil production was in November 2011. The new figure indicated that the world’s sixth largest oil producer — after Saudi Arabia, Russia, US, China and Canada — was ready to move on from production stagnancy caused by the crippling sanctions.

Indonesia, on the other hand, has continued to import oil to meet growing domestic demand. Data from the International Trade Center (ITC) shows that in the past 10 years, the volume of petroleum oil-related imports has surged 30 percent.

State-owned oil and gas giant Pertamina already signed a memorandum of understanding (MoU) with the National Iranian Oil Co. (NIOC) in August, which allowed the Indonesian company access to the two fields’ data rooms to study for six months.

Based on data obtained from NIOC’s website, the combined fields had a production capacity of almost 100,000 bopd with reserves of over 5 million barrels.

Energy and Mineral Resources Minister Ignasius Jonan said Pertamina had to compete with other oil and gas giants abroad, including France’s Total SA, Italy’s Eni SpA and Russia’s Lukoil, to obtain the operatorships.

Pertamina upstream director Syamsu Alam said the company planned to submit its technical and financial proposal in February after it completed its in-depth study of the two fields.

However, it will be impossible to gain 100 percent of operation as Iranian regulations stipulate the need to partner with local companies.

“We will not seek a 100 percent share. It will be in the form of a cooperation, not just a production-sharing contract [PSC] like we do [in Indonesia]. It may be in the form of a service contract, but we will get the entitlement, much like in Iraq,” he said, adding that Pertamina was also eyeing several other fields in the country if its preliminary proposal was rejected.

Pertamina has set a target to amass a large amount of reserves through increased overseas partnerships, acquisitions and takeovers of oil and gas fields with soon-to-be terminated contracts.

Syamsu said Pertamina prepared US$1 billion to 1.5 billion every year for acquisitions.

It hopes to boost upstream production to 1.9 million barrels of oil equivalent per day (boepd) by 2025 from a measly production of 624,000 boepd in 2015. Up to 473,000 boepd is set be acquired from fields overseas.

ReforMiner Institute researcher Pri Agung Rakhmanto said it was essential that Indonesia gained a participating contract in the two Iranian oil fields in order to make up for the country’s reduced production rates.

The Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) estimates that the country’s reserves have decreased by around 0.65 billion stock tank barrels per year.

Pri Agung, however, acknowledged that it would take more than technical ability for Indonesia to grab the operatorship status. “There are geopolitical issues that Iran has to consider as well.”