RI to ask Iraq to honor oil and gas contract

RI to ask Iraq to honor oil and gas contract

Dow Jones, Jakarta

Indonesia will ask the new Iraqi government to honor an oil and gas exploration and production contract it awarded in November to state company Pertamina, Mines and Energy Minister Purnomo Yusgiantoro said on Tuesday.

Former President Saddam Hussein last year awarded the contract to Pertamina for the Western Desert block, which is estimated to have three million barrels of crude oil.

But Indonesia is worried that the new government will revoke the contract, after having reportedly canceled or suspended contracts with Russia and China, Purnomo said, without elaborating.

Thamir Ghadhban, the U.S.-appointed de facto Iraqi oil minister, reportedly said Saturday that a Chinese deal to develop the Al-Ahdbad field in Iraq had been suspended.

Purnomo said he will raise the matter during a meeting of the Organization of Petroleum Exporting Countries (OPEC) in Qatar early next month. Indonesia is OPEC's only Southeast Asian member.

"No matter what, the contract must be respected," he told reporters.

He added that he doesn't expect global oil prices to fall, as Iraqi oil isn't expected to flood the market in the near future.

"Iraq must fulfill its domestic demand first before it can export its crude oil," he said.