Pertamina to resume Iraq venture

The Jakarta Post, Jakarta

State-owned oil and gas firm PT Pertamina hopes for an immediate resumption of its Iraq oil exploration project, following last month's historic handover of sovereignty to the new Iraqi government.

Pertamina upstream director Bambang Nugroho was quoted by detik.com as saying the company hoped to receive official confirmation on its contract status for exploring Western Desert Block III in Iraq.

"The Iraqi oil minister has given a positive sign in regards Pertamina's proposal. We are a potential partner in the project," Bambang said on Thursday.

Pertamina won the contract in 2002 from the former government under Saddam Hussein. However, concerns arose that the new government might suspend the contract, as similar contracts with Russia and China have reportedly been put on hold.

Bambang said the Iraqi government had also indicated that Pertamina could receive new projects to develop oil fields with an output of 100,000 barrels a day.

Pertamina started oil exploration last year in Western Desert Block III, which is on the Iraq-Saudi Arabia border and has an estimated 3 million barrels in reserves.

The firm plans to invest about US$24 million in the block for the first three years, and another $16 million over the following two years.

Pertamina put its Iraq project on hold when the U.S.-led coalition invaded Iraq in March 2003. The company resumed a seismic survey early this year, but pulled out their team in April when security began deteriorating.

The company said earlier the block might start production in seven years if the project went well.

Bambang did not give any details as to whether the Pertamina team had been sent back to Iraq.