Pertamina signs deals for Libyan blocks

Pertamina signs deals for Libyan blocks

Leony Aurora, The Jakarta Post, Jakarta

State oil and gas firm PT Pertamina has signed contracts with
Libya to explore and develop two oil and gas blocks, committing
US$49.1 million in the first five years of the exploration
period.

Pertamina's vice president Mustiko Saleh and National Oil
Corporation (NOC)'s chairman Abdullah Al Badri, representing the
Libyan government, signed the exploration and production sharing
agreements in Tripoli on Dec. 8, Pertamina said in an e-mailed
statement on Monday.

Pertamina will spend $49.1 million to conduct seismic tests
and drill two wildcat wells in Sirte block in the Sahara desert
and another two wells in Sabrata block in the Mediterranean Sea
during a five-year exploration period, company spokesman Mochamad
Harun said.

Pertamina was one among 19 companies that were awarded tenders
in October to explore blocks in Libya, where Africa's largest
crude oil reserves lie. The company agrees to receive 8.8 percent
of output in Sirte and 11.7 percent in Sabrata, lower than at
least 15 percent usually applied in Indonesia.

Libyan evaluation teams have identified eight prospective
areas in Sirte with reserves of about 3.5 trillion cubic feet
(tcf) of gas and 75 million barrels of oil, Harun said. Sabrata,
located next to Sarir, one of Libya's largest oil fields, is
expected to hold 400 million barrels of recoverable oil.

Mustiko said on Oct. 11 that Pertamina expected to spend $3.6
billion to develop the blocks over the 30-year contract period
under an agreement with Germany's Commerzbank AG. The company
will start exploration in both blocks next year and has targeted
onstream production to commence in 2009.

The surge in crude prices has prompted oil companies to boost
exploration activities to discover more of the fossil fuel. Crude
prices in New York touched a record high of $70.85 per barrel on
Aug. 30 but have eased to around $60 a barrel in recent weeks.