Pertamina to start oil exploration in Iraq

Pertamina to start oil exploration in Iraq

Associated Press, Jakarta

Indonesia's state-owned Pertamina oil company will restart an oil and gas exploration project in Iraq interrupted earlier this year by the U.S.-led attack on that nation, said a statement received on Thursday.

"We are very pleased to finally begin exploration in Iraq and to open an office in Baghdad," Pertamina's president Baihaki Hakim said in the company statement.

Pertamina will invest around US$24 million in the first three years in the Western Desert block, it said. It has an option to extend its exploration activities by another two years with a further $16 million.

A Pertamina spokesman said the company received clearance from Iraq's Oil Ministry last week to restart the project in November.

"We have the green light," said Mochamad Harun. "A contract is a contract and must be fulfilled."

Former Iraqi President Saddam Hussein last year awarded the contract to Pertamina for the Western Desert Block 3, located 150 kilometers south of Baghdad, which is estimated to have three billion barrels of crude oil.

The exploration and production contract was ratified by Saddam's rubber-stamp parliament last October. The contract stated that work was supposed to have started within six month by April, but it was delayed because of the invasion and occupation of Iraq.

When Saddam was toppled, Pertamina expressed concern that the new U.S.-sponsored government would revoke the contract, after having reportedly suspended contracts with Russia and China.