Pertamina's Libya oil blocks could contain 1b barrels

Leony Aurora, The Jakarta Post/Jakarta

State oil and gas firm PT Pertamina may have more than 1 billion barrels of oil reserves in two Libyan blocks whose concession rights it recently acquired.

The Sabrata offshore block may contain 690 million barrels of oil, while the onshore Sirt block may contain between 300 million and 400 million barrels in reserves, Pertamina president director Widya Purnama said on Friday.

"We will start drilling as soon as possible," Widya said, adding that the Sirt block was ready for drilling with the seismic tests already having been conducted.

Pertamina was among 19 winners of a tender for oil blocks in Libya, where Africa's largest crude oil reserves lie. The winners of the tender were announced on Oct. 2. Indonesia's largest privately controlled oil and gas company, PT Medco Energi Internasional, entered bids for four blocks, but failed to win any of its bids.

Widya said Pertamina, through its subsidiary Pertamina EP Libya Ltd., would form a joint venture, in which it would hold a majority 55 percent stake, to explore the blocks.

Partners in the joint venture could include Indonesian as well as foreign companies, he said.

"We will sign the contract on Oct. 15 in Tripoli," said Widya.

Other successful bidders in the tender were U.S. energy giant ExxonMobil Corp., Italy's Eni Spa and Japan's Mitsubishi Oil Co.

Based on the winning bids, the Libyan government will receive between 71.5 percent and 92.5 percent of any petroleum produced by the blocks, as well as pocketing signing bonuses totaling US$103.4 million,

The figures of the production splits and signing bonuses offered by Pertamina have not been released.

The surge in global crude prices has prompted oil companies to boost exploration activities. Crude prices in New York have jumped by 42 percent this year, touching a record high of $70.85 per barrel on Aug. 30.

Pertamina has lagged behind its counterparts in Asia, including Malaysia's Petronas, in acquiring acreage and producing oil abroad.

Many of Pertamina's smaller and aging fields in Indonesia are underdeveloped, waiting for partners with the financial and technical ability to develop them.