PT Pertamina to invest $1 billion on production

Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Dec. 22 -- Indonesia's state-owned PT Pertamina plans to spend 11 trillion rupiah ($1 billion) to upgrade assets and boost production in Limau oil fields in South Sumatra and Tambun gas fields in Bekasi, West Java.

Of the total upstream investment, 6 trillion rupiah will go to PT Pertamina EP, said Karen Agustiawan, Pertamina's upstream director.

The company expects to increase oil production 7% in 2009 to 171,250 b/d from 2008 production estimates.

Pertamina's production comes from two subsidiaries. They are Pertamina EP, which produces 80% of the parent firm's total output, and PT Pertamina Hulu Energi, which manages and develops oil and gas upstream assets through partnerships.

Production targets outlined
Of the 2008 targeted 159,000 b/d, some 125,000 b/d will be from Pertamina EP while Pertamina Hulu provides the rest. Of 2009's targeted 171,250 b/d, Pertamina EP is expected to contribute 132,250 b/d.

"The two fields are the backbone of Pertamina EP, and they will become pilot projects (for facility upgrading)," said Agustiawan, who did not specify the upgrades. Pertamina EP expects 6,750 b/d of production to come on stream next year from an oil block in Cepu.

Pertamina plans to acquire bigger shares in several blocks, including the West Madura block in East Java, Total's Mahakam block in East Kalimantan, and Chevron's deepwater fields off East Kalimantan.

Pertamina requested a bigger stake in Inpex's Masela offshore block in the Timor Sea.

"We hope we can get 30% (of the block)," said Pertamina President Director Ari Soemarno.

Pertamina also is negotiating with Verenex Energy Inc. to buy the Canadian firm's stakes in Libya's Ghadames basin.

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