Petrochina, Pertamina ink oil cooperation
Petrochina, Pertamina ink oil cooperation
Xu Yihe, Dow Jones, Singapore
China and Indonesia have expanded their energy ties, through a
partnership agreement in the upstream oil sector between
Indonesia's Pertamina and PetroChina Co., a China-based industry
official said Tuesday.
The agreement between Indonesia's state-owned oil and gas
company and China's largest oil company will make Indonesia
China's largest energy supplier in Asia by 2005.
The two countries are in a position to compliment each other,
with China keen to seek overseas oil and gas reserves, while
Indonesia needs cash to develop its readily available energy
resources, the official told Dow Jones Newswires.
The pact was signed Sunday during Indonesian President
Megawati Sukarnoputri's visit to China.
The two countries have also agreed to establish a joint energy
forum.
The partnership between Pertamina and PetroChina comes as
Chinese oil companies are aggressively seeking opportunities to
explore and produce oil and gas overseas to make up for the
domestic supply deficit, he said.
The partnership will lead to onshore and offshore oil and gas
exploration and development in Indonesia which will likely cost
more than US$100 million, he said.
According to another China-based industry official close to
PetroChina, PetroChina may acquire a small oil field in
Indonesia's Sumatra.
PetroChina and CNOOC Ltd., China's only offshore oil operator,
have also expressed interest in bidding for exploration and
production rights for 17 onshore and offshore oil and gas blocks
that Pertamina will tender later this year.
In addition to direct investment in Indonesia's upstream E&P
projects through production sharing contracts, or PSCs,
PetroChina plans to provide Indonesia with enhanced oil recovery
technology, he said.
China invested in Indonesia's oil and gas industry as early as
1992 when China National Offshore Oil Corp., the parent company
of CNOOC Ltd., bought a 39.51% stake in the Malacca field in
Indonesia.
The latest acquisition was CNOOC Ltd.'s purchase of five oil
and gas projects from Spain's Repsol YPF S.A. in Indonesia in
January.
Industry sources said these current ties will pave the way for
China to award Pertamina all, or part of, a contract to supply
China with liquefied natural gas by 2005.
A Chinese consortium led by China National Offshore has
shortlisted Indonesia as one of one of the three potential supply
sources for its 3-million-metric-ton s-a-year Guangdong LNG
project. Australia and Qatar are the other interested parties.
Pertamina and its PSC partner BP Indonesia will start
developing the Tangguh gas field in July, an indication of its
confidence in being awarded the contract, which is worth as much
as US$500 million a year.
In Beijing, Energy and Mineral Resources Minister Purnomo
Yusgiantoro said he is confident the Tangguh project will succeed
in a bid for a $10 billion liquefied natural gas supply contract
to southern China, Business Weekly reports.
"Indonesia is very optimistic about the bid," Purnomo said
speaking after a meeting by Indonesian President Megawati
Sukarnoputri with China's leadership during an official state
visit. "Indonesia has always been trying to do its best to win
the contract."