Pertamina eyes alliances with foreign firms<\/p>\n
KUALA LUMPUR (Dow Jones): Indonesia's state-run Pertamina
\nplans to reshape its upstream operations following the passage of
\nthe oil and gas bill by forming alliances with foreign partners
\nand aggressively participating in domestic and overseas oil and
\ngas projects, Gatot K. Wiroyudo, senior vice president of
\nPertamina's upstream operations said Tuesday.<\/p>\n
\"Currently, Pertamina produces 180,000 barrels (a day) of oil
\nequivalent, which includes gas,\" Gatot said on the sidelines of
\nthe three-day Sixth annual Asia Oil and Gas Conference in Kuala
\nLumpur.<\/p>\n
\"We will acquire reserves not necessarily domestic and also
\nthrough cooperation with foreign firms,\" he added.<\/p>\n
Gatot reiterated that Pertamina aims to become Indonesia's
\nsecond largest oil producer within five years, which he said will
\nrequire Pertamina raising its production capacity by 40% within
\nthat time frame.<\/p>\n
PT Caltex Pacific Indonesia, a joint venture between Chevron
\nCorp. and Texaco Inc., is the country's largest oil producer with
\na total production capacity of about 700,000 barrels per day.
\nIndonesia's crude output in May averaged 1.234 million barrels
\nper day.<\/p>\n
During a conference panel discussion Tuesday, Gatot said
\nPertamina is looking for ways to develop projects in cooperation
\nwith Malaysia's Petroliam Nasional Bhd., or Petronas, and Indian
\nOil Corp.<\/p>\n
\"We will seek bilateral and multilateral cooperation in this
\nsector,\" he said.<\/p>\n
He said Pertamina will consider oil and gas exploration and
\nproduction projects in North Africa, the Middle East and
\nSoutheast Asia.<\/p>\n
Pertamina's President and Chief Executive Baihaki Hakim said
\nMonday that he expected the Indonesian Parliament to make a final
\nvote on the oil and gas bill aimed at opening the country's
\ndownstream sector to competition and privatizing Pertamina in
\nAugust. However, most analysts believe this is likely to occur in
\nthe late third or fourth quarter this year at the earliest.<\/p>\n
Once the oil and gas bill is ratified, Pertamina will no
\nlonger supervise Indonesia's production sharing contracts; it
\nwill be competing with international oil majors for the same
\ncontracts.<\/p>\n
Gatot said the blueprint for the restructured oil and gas
\nindustry also allows for participation of the provincial
\ngovernments and won't require any adjustment in production
\nsharing contracts.<\/p>\n
\"I visualize that when we develop a production facility or
\npipelines, we will need a certain parcel of land; a certain
\ndegree of involvement by the local government at the operational
\nlevel is seen,\" he said. \"A certain degree of ownership from the
\nlocal provincial government is needed to maintain and keep
\nsecurity.\"<\/p>\n
Gatot said Indonesia currently holds recoverable oil reserves
\nof 9 billion-10 billion barrels, reiterating Baihaki's remarks
\nMonday that by 2005 to 2006 Indonesia's oil production and
\ncapacity will dry up.<\/p>\n
\"The Indonesian domestic market is increasing by 7% a year, so
\nsooner or later, we will be a (net) importer rather than exporter
\nof crude oil,\" Gatot said.<\/p>\n
Baihaki said Monday during a panel discussion that Indonesia
\n\"naturally, in that case...shouldn't be a member of the
\n(Organization of Petroleum Exporting Countries).\"<\/p>\n
When asked if Pertamina was concerned that provincial unrest
\nwould frighten away foreign investment into Indonesia's upstream
\nsector, Gatot said the disturbances were temporary and expected
\nto be resolved in the next few months.<\/p>\n
ExxonMobil Oil Indonesia Corp., a unit of Exxon Mobil Corp.
\n(XOM), shut operations at its Arun gas field in early March
\nciting disintegrating security in restive Aceh province.<\/p>\n
Caltex Indonesia has seen production disrupted by strikes,
\nblockades of facilities and theft of equipment over the past 18
\nmonths. Caltex, which operates on the island of Sumatra, says
\nthat villagers steal about $1 million of power cables, pipe and
\naluminum sheeting on pipelines each month. Last year, Caltex
\nestimates that theft cost the company $300 million of oil
\nproduction, and this year the company forecasts an increase to
\n$500 million.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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