Pertamina, Petrovietnam cooperate in oil sector

JAKARTA (JP): State oil and gas company Pertamina signed a memorandum of understanding (MOU) on Friday with Vietnam state- owned oil and gas company Petrovietnam to cooperate in oil and gas exploration and production.

Pertamina's upstream director Gatot K. Wiroyudo said the MOU paved the way for Pertamina to enter Vietnam's oil and gas upstream sector and was in line with Pertamina's efforts to boost its oil and gas reserves.

The MOU was signed by Gatot and vice president of Petrovietnam Tranc Canch.

Under the MOU, Pertamina will obtain rights to develop Vietnam's oil and gas resources, while Petrovietnam's subsidiary Petroleum Investment and Development Company will be given similar rights in Indonesia.

Gatot said Pertamina will invest $2.5 million over the next four years to conduct exploration for oil in Block 17 and several other offshore blocks in South Vietnam. The budget includes $500,000 for the geological study and $2 million for explorations.

"The geological study will be carried out for three to six months starting next week," Gatot said.

He said the blocks were "prospective", but he did not specify.

In Indonesia, Gatot said, Petrovietnam will be offered an operating area owned by Pertamina in the oil and gas rich province of Irian Jaya.

Gatot said Pertamina and Petrovietnam had yet to finalize discussions on terms regarding production sharing in the areas to be developed by the companies.

According to Gatot, Pertamina had allocated Rp 5 trillion (about US$500 million) for exploration and production activities as part of its efforts to increase its oil and gas reserves to 633.5 million barrels of oil equivalent (MMBOE) this year from 509.9 MMBOE last year. (05)