State-owned oil and gas firm Pertamina seeks to acquire more overseas oil and gas blocks in a move to meet its sizeable production target by 2025. Pertamina’s upstream director Syamsu Alam said the foreign acquisitions would contribute around 33 percent to its overall production goal of 1.9 billion barrels of oil equivalent per day (boepd) in the next eight years.
The company has set up a presence in twelve countries across the globe. Two new foreign blocks in Gabon and Nigeria have commenced a eyes overseas acquisition Pertamina has operations in 12 countries Company to acquire more blocks in countries where it already has presence production, adding to existing blocks in Algeria, Iraq and Malaysia.
Seven others located in Canada, Colombia, France, Italy, Myanmar, Namibia and Tanzania are still under exploration. The foreign acquisitions would be carried out in countries where Pertamina currently had operations, Syamsu said, adding that the company also planned to expand its production facilities in
Malaysia and Algeria.
“The reason for the expansion to foreign oil and gas blocks is to ultimately strengthen our reserves and boost production. Gas and oil produced overseas will be brought back to Indonesia for processing to fulfill domestic demand,” he said during a Pertamina event in Cirebon, West Java, on Sunday.
Syamsu reiterated that Indonesia would need to maximize output from its energy assets to support annual domestic economic growth of more than 5 percent. While Pertamina aims to strengthen its foothold abroad, it is also pushing its oil and gas output at home by taking over operations at eight blocks next year after the expiration of production contracts, including the Sanga-sanga Block in East Kalimantan and the Offshore Southeast Sumatra (OSES) Block.
During the first quarter, Pertamina’s total oil production amounted to 318,000 barrels per day (bpd), while gas production settled at 1.9 million standard cubic feet per day (mmscfd), according to Pertamina’s upstream strategic planning and operations evaluation senior vice president Meidawati.
The oil rich Cepu Block in Central Java, which is operated by ExxonMobil Cepu Limited, contributed a sizeable amount of 88,000 bpd of oil. Significant overseas production hubs, such as Algeria, Malaysia and Iraq, meanwhile, provided 87,000 bpd of oil and 266 mmscfd of natural gas.
Pertamina produced 312 bpd of oil and 338 boepd of gas in 2016, slightly higher than the 278 bpd and 328 boepd achieved in 2015. For this year, it aims to generate 334 bpd of oil and 359 boepd of gas, bringing the overall production of 693 boepd, up from last year’s 650 boped. Even so, Syamsu noted, the production rate was still below expectations, and Pertamina needed to implement efficiency measures to address the issue.
“Even though oil and gas consumption is still high in Indonesia, production rates are steadily falling, and our reserves are also thinning out. There needs to be a restructuring of energy prices as well as technological innovation in order to achieve cost efficiency on our part,” he said.
Data from Pertamina and the Energy and Mineral Resources Ministry show that domestic oil demand could hit 1.6 million bpd by 2020. Pertamina’s revenue and profit from its upstream business reached highs of US$9.08 billion and $2.02 billion, respectively, in 2014, which was attributed to high global energy prices throughout that year. In 2016, its revenue fell to $6.27 billion, while its profit dropped to $980 million.
Jakarta Post, Page-15, Tuesday, April, 11, 2017
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