“We will see what works out for Pertamina. We are not the operator in Malaysia or Iraq, but we are actively involved by providing exports, or [temporary support personnel]."
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State-owned oil and gas company Pertamina aims to obtain management rights over oil and gas blocks in Russia by the end of this year. This step is part of the cooperation between Pertamina and Russian Rosneft Oil Company in the construction of an oil refinery in Tuban, East Java.

Pertamina’s Senior Vice President of Upstream Business Development Denie S. Tampubolon said that the company is currently reviewing several oil and gas blocks in Russia. “We are trying to do that as quickly as we can. We should be able to cut a deal by the end of the year,” Denie said after attending a meeting at the offices of the Coordinating Ministry for Maritime Affairs on Tuesday (23/8). (Read: Tuban Refinery Contract Signed: Pertamina’s Six Reasons for Choosing Rosneft)

As part of this cooperation in the upstream sector, Pertamina will buy management rights in oil and gas blocks belonging to Rosneft. However, Denie was unable to reveal the percentage of management rights that Pertamina will own. He said that would be decided once the review was completed.

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Also there is no assurance that Pertamina will become the operator of the oil and gas blocks. “We will see what works out for Pertamina. We are not the operator in Malaysia or Iraq, but we are actively involved by providing exports, or [temporary support personnel] to support operational activities,” Denie said.

Denie also said that Pertamina has its own criteria for owning a block. At the very least, the block must have more than 50 million barrels of oil equivalent (mmboe). Pertamina’s main goal is to have management rights in two or three oil and gas blocks in Russia.

Pertamina officially signed the oil and gas cooperation framework agreement with Rosneft on 26 May 2016. Under the agreement, Rosneft had the chance to construct the oil refinery in Tuban, and Pertamina the chance to manage oil and gas blocks in Russia.

At that time, Pertamina CEO Dwi Sutjipto said the agreement also included Pertamina’s exclusive ownership of pat least two oil and gas blocks in Russia within eight months. “Each with a 15 percent (share of management rights)” Dwi said. (Read: Pertamina Obtains Two Oil and Gas Blocks in Russia)

The cooperation with Russia is important to maintain Indonesia’s future energy supply. Dwi expects that the agreement will be able to solve the country’s long-standing problem with crude deficit.

Although it only has the chance to manage two oil and gas blocks, Pertamina hopes to be able to work on more oil and gas blocks in Russia. The target is to gain additional oil production of 35,000 barrels per day and an oil reserve of 200,000 barrels. (Read: Oil Reserves Dwindle, Hit Lowest in 16 Years)

Pertamina also set a target to increase oil production from overseas oil and gas fields five-fold to 600,000 barrels per day in the next nine years. Currently, Pertamina’s oil production from oil and gas fields in three foreign countries is just 85,000 barrels per day.