Pertamina to go to Uzbekistan
JAKARTA (JP): The state-owned oil company Pertamina is to expand its oil exploration activities to Uzbekistan, a former Soviet Union republic rich in oil and gas reserves, a company director said.
"We're sounding out the possibility of oil exploration there. And the Uzbekistan government has given us a green light," Pertamina's director of general affairs, Baharuddin, told the press yesterday.
Speaking at an orientation gathering with reporters, he said that his company is likely to sign a memorandum of understanding with the country in the near future.
"We're also seeking partners to finance the planned oil exploration as we cannot do it on our own," he said.
According to Baharuddin, if the project is realized, it will be the company's first oil exploration project abroad.
He said foreign oil exploration is part of the company's strategy to expand its oil and gas businesses in the future.
He noted that his company will also continue to minimize costs of production to win competition on the world market. "Now the trend in the energy businesses is not how much you can sell your products for to get as big margins as possible but how you can cut your costs.
Changes
"We also have to monitor changes in domestic and international markets quickly so that we can devise our own strategy to compete," he said.
"For the time being we're dealing with a problem posed by Oman, which is offering its natural gas without a floor price requirement," he said, adding that "It could become a serious problem for us in selling our natural gas."
Currently, Pertamina sells its liquefied natural gas (LNG) for US$3.5 per million British Thermal Units (BTU) with a floor price of $1.93 per million BTU.
Oman, he said, has already secured a contract to sell four million cubic feet of gas to South Korea and is now offering its natural gas to Thailand under a no-floor price arrangement.
Thailand had previously planned to buy gas from Indonesia, who would pipe it from the Natuna gas field in Riau.
"I don't know whether Thailand will choose gas from Oman or Indonesia," he said.
He added that Pertamina is exploring the possibility of exporting its natural gas by pipeline to other members of the Association of Southeast Asian Nations.
Besides Indonesia, the association comprises Brunei, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Baharuddin also said that the state firm is offering swap and backhaul-trip delivery systems to other oil and gas-producing countries.
"Under a swap system, if we get a contract to sell gas to India, for example, we will ask a nearby producing country like Iran to supply the gas for us under a profit sharing scheme. But if Iran gets such a contract from Japan, Indonesia will supply the gas to Japan," he said.
On the backhaul-trip delivery system, he cited Saudi Arabia as an example. All Saudi tankers transporting LNG to South Korea and Japan usually return home vacant. "We can charter the ships to transport our LNG product to our customers in Sri Lanka, for example, on their way home. This will improve efficiency," he said. (13)