Pertamina will not start soon

Dow Jones, Baghdad

A senior Iraqi oil official Wednesday denied press reports that Indonesia's PT Pertamina will start oil and gas exploration in the country early next year.

"We are not aware of Pertamina's plans to start work in Iraq early next year," the official, who specializes in oil and gas field development, told Dow Jones Newswires.

Indonesia's national oil and gas company said last month it had opened an office in Iraq and expected to start exploration in the country early 2004.

Pertamina's president, Ariffi Nawawi, told reporters in Jakarta his company would invest around $20 million during the exploration stage.

"Any foreign company now can open offices in Iraq but that doesn't mean it can start work," the official said.

Last year, Iraq's former government awarded Pertamina block 3 of the giant Iraqi Western Desert oil and gas fields, northwest of Baghdad.

The block is estimated to have 3 million barrels of crude oil.

The U.S.-led invasion of Iraq delayed Pertamina's plan to start exploration in the country last March

"The contract with Pertamina has not been canceled or confirmed so far. It has been left as it was," the official said.

Iraq's Oil Minister Ibrahim Bahr al-Uloum said last month that he wanted to check the legality of the contracts signed by Saddam Hussein's government, whether they were signed on a competitive basis and if they meet the interests of the Iraqi people.

"After we finish this process, we will announce whether these contracts are viable or not," he said.

But the legality of these contracts is in question, because the deals were signed under UN sanctions. They were also signed after direct bilateral negotiations with Saddam's government and not after a competitive bidding process.