Pertamina wants to acquire Palmerah oil block

The Jakarta Post, Jakarta

State-owned oil and gas company PT Pertamina is one of eight companies who have expressed their interest in acquiring the Palmerah oil and gas concession in South Sumatra, a senior official said on Wednesday.

"Pertamina has also expressed interest in the Palmerah block. But the government will not give Pertamina preferential treatment," Iin Arifin Takhyan, the director general of oil and gas at the Ministry of Energy and Mineral Resources, told reporters.

Pertamina, which was converted into a limited liability company in September, has long been pampered by the government with oil and gas acreages and other facilities.

Pertamina's financial director Alfred Rohimone had said that the company would focus 70 percent of its business on oil and gas exploration and development.

Iin said that aside from Pertamina, there were also other companies who had expressed their interest in the Palmerah block.

However, Iin did not name the other companies. He only said the companies consisted of both local and foreign firms.

The Palmerah block is one of the eight oil and gas acreages offered by the government to investors. The other acreages are offshore Anambas (Riau), onshore Palmerah (South Sumatra), offshore Biliton (Bangka Belitung), onshore Bangkanai (East Kalimantan), offshore Bontang (East Kalimantan), offshore Halmahera (Maluku), offshore West Salawati (Papua) and onshore Asmat (Papua).

Iin said the Palmerah block had attracted the strongest interest from investors.

Among the foreign companies which have submitted proposals to acquire the blocks are ConocoPhilips and Malaysian Genting Oil.

"The selection of the winning bids will be based on the work commitment program, bonuses and geological data," Iin said, adding that the winners would be announced on Nov. 7.

With the current acreage offering, the government will have awarded a total of 17 oil and gas acreages this year compared to last year when only one oil and gas concession was awarded.

Earlier this year, the government awarded 9 oil and gas concessions worth US$170 million.

This will help lift the country's oil and gas output, which has been in the doldrums for sometime due to declining investment.

Indonesia currently produces 1.1 million barrels of oil per day (bpd), lower than its quota of 1.317 million bpd set by the Organization of Petroleum Exporting Countries (OPEC).