Pertamina Earmarks $1 Billion for Energy Acquisitions

PT Pertamina, Indonesia’s state energy company, has allocated $1 billion for acquiring overseas and domestic oil and gas blocks this year to help increase output to meet demand in Southeast Asia’s biggest economy. 

Pertamina is in talks with several domestic energy companies and has listed 20 overseas oil and gas assets as potential targets, Investment Planning Director Ferederick Siahaan told reporters at a conference in Jakarta today. 

“We may acquire several assets this year with minimum production of 5,000 barrels of oil a day,” he said. Pertamina expects to purchase gas assets producing at least 100 million cubic feet a day, Siahaan said. 

Indonesia is increasing investments to help stem a decline in output at aging oil and gas fields, which led to the country withdrawing from the Organization of Petroleum Exporting Countries in 2008. 

Jakarta-based Pertamina is targeting oil and gas blocks in Africa, the Middle East and Caspian Sea, including a stake in the Kashagan oil field in Kazakhstan, Siahaan said.

“We’re seeking blocks that are already in production or development stage,” Siahaan said. The acquisition may help Pertamina to reduce crude imports and raise output by the equivalent of 100,000 barrels of oil a day in 2015, he said. 

Pertamina agreed in June to buy a 15 percent stake in the Semai II oil and gas block in Papua from Murphy Oil Corp., PTT Exploration & Production Pcl and Inpex Corp., Director Bagus Setiardja said at the time. 

The company said in December it had dropped a plan to acquire a stake in Encore Energy Ltd., the parent company of PT Medco Energy Internasional. 

Pertamina plans to spend $1.38 billion until 2014 to develop the Donggi-Senoro liquefied natural gas project in Sulawesi, Siahaan said today. 

Indonesia produced 957,000 barrels of oil a day last year, falling short of its target of 965,000 barrels. The government expects output to reach 952,000 barrels a day this year. Source: Bloomberg