Indonesia’s PT Pertamina to spend $1 billion on blocks

Indonesia’s state-owned PT Pertamina has allocated 10.2 trillion rupiah ($1 billion) for acquisition of new oil and natural gas blocks this year out of a total upstream budget of 29.5 trillion rupiah, according to Pertamina President Director Karen Agustiawan.

Feb. 8, 2010

2 min read

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 8-- Indonesia’s state-owned PT Pertamina has allocated 10.2 trillion rupiah ($1 billion) for acquisition of new oil and natural gas blocks this year out of a total upstream budget of 29.5 trillion rupiah, according to Pertamina President Director Karen Agustiawan.

Karen said new acquisitions would be sought in Southeast Asia and Australia, especially in Indonesia where contracts have expired, including the rights on 24 oil and gas blocks set to expire in 2011-20. In 2011, several blocks will expire, among them ExxonMobil’s Pase block, and several owned by Medco Energy, including the Bawean block and the North Sumatra Block A.

“Pertamina urges the government to automatically transfer the rights over all expired production-sharing contracts to Pertamina,” said Karen, adding that the practice of transferring expired contracts to national oil companies was common in other countries.

Frederick ST Siahaan, Pertamina finance director, said the company’s total investment for 2010 is expected to reach 46 trillion rupiah.

“We hope about 35-40% of the investment required can be financed from our internal sources,” said Frederick. He said the remaining funds would be financed from loans and bonds—including one note with a value of $1-$1.5 billion.

Contact Eric Watkins at [email protected]