(Adds quotes, details on Pertamina, Duvernay, Talisman)
By Nia Williams
CALGARY, Alberta, June 11 Indonesia's state
energy firm Pertamina is in talks with Canadian
energy company Talisman Energy Inc about a potential
partnership in Alberta's Duvernay shale play, Pertamina chairman
Dr Sugiharto said on Wednesday.
Speaking at an energy conference in Calgary, Alberta,
Sugiharto said discussions were in their initial phases but
Talisman had huge undeveloped reserves in the Duvernay and
Pertamina should be able to develop a partnership in Canada.
"We spent the whole morning yesterday with them and met
their CEO, they made a full presentation about the Duvernay
blocks," Sugiharto said, speaking to reporters after a speech.
"I believe having experienced since 1998 partnership with
Talisman we should be able to develop a partnership here in
Talisman, Canada's No. 5 independent oil producer, is
already in partnership with Pertamina in five blocks in
Indonesia. South-East Asia's largest economy was once
self-sufficient in oil and gas but is now buying overseas oil
and gas assets to supplement declining domestic output.
Pertamina's capital expenditure budget is $7.9 billion in
2014, Sugiharto said. Over the next five years, the company
plans to spend $61 billion, 83 percent of which will be on
upstream development including mergers and acquisitions.
Sugiharto said Pertamina still needed to undertake due
diligence on the Duvernay blocks and the company had no time
line in mind.
It would be Pertamina's first investment in Canada's oil
industry. Last year the company held discussions with Norwegian
company Statoil and Thailand's PTTEP Canada
about their oil sands leases.
"Last year we had been trying to solicit merger and
acquisition here in Canada, the blocks operated by Statoil and
PTT, but we felt that the target would not sit with our terms
and conditions," Sugiharto said, referring to PTTEP Canada's
Talisman holds approximately 352,000 net acres of land in
the liquids-rich Duvernay play in west-central Alberta and has
said it will hunt for a joint-venture partner for its
The company has been selling assets and cutting costs as it
looks to return to consistent profitability and boost shares
that have underperformed its peers in recent years.
"In the Duvernay, we drilled two wells in the first quarter
to retain acreage and to delineate our extensive land holdings.
We will need third party funding to fully develop the play and
work is underway to bring in a suitable partner," chief
executive officer Hal Kvisle said in an earnings call last
Talisman spokesman Kyle Glennie declined to comment on the
Shares in Talisman were last up 23 cents on the day at
C$11.23 on the Toronto Stock Exchange.
(Additional reporting by Scott Haggett; editing by Andrew Hay)