Pertamina eyes stakes in blocks when foreign contracts expire
By Muklis Ali
JAKARTA, June 30 (Reuters) - Indonesia's state oil firm Pertamina wants to take stakes in two key gas projects where the foreign partners are in talks with Indonesia's government to extend existing contracts, a Pertamina official said on Tuesday.
Pertamina has previously indicated it wants to expand its upstream activities to boost oil and gas production, and that it was looking at several potential oil and gas fields.
The official said these include the Mahakam block in Kalimantan, which is currently operated by a unit of France's Total (TOTF.PA) and is one of Indonesia's biggest gas fields, and the Madura BD field in East Java, operated by Husky Energy Inc (HSE.TO) and China's CNOOC (0883.HK).
Pertamina's interest in those blocks comes as Southeast Asia's biggest economy is making increasingly nationalistic noises about ownership and control of energy and mineral resources in the run-up to the July 8 presidential elections.
The Pertamina official, who declined to be quoted by name, said that Pertamina wants a stake in the Mahakam block when Total's contract expires in 2017.
Total and Japan's Inpex (1605.T) each hold 50 percent in the Mahakam block, which supplies most of the gas for Indonesia's Bontang liquefied natural gas plant.
"Pertamina wants a higher stake, if possible a majority, in Mahakam block. The block (contract) will expire in 2017, which means that after that year, the block is owned by the government," the official told Reuters.
"The government must hold out a hand to help Pertamina, especially when oil and gas blocks expire, they should be given to state-owned companies," the official added. "We have the capability to manage big oil and gas fields, so give them to Pertamina".
The Indonesian government is currently studying a proposal from Total to extend its contract for the Mahakam block in gas-rich Kalimantan, on Borneo island.
Pertamina also wants to have the biggest share in the Madura block, the official added, now that Indonesia is considering extending a contract for the natural gas block in East Java.
The contract for Husky and China's CNOOC, joint developers of the Madura BD field in Indonesia's Madura Strait, is due to expire around 2010.
Pertamina has said it would boost oil output by about 10 percent to 171,000 barrels per day this year, up from 156,000 bpd in 2008.
Indonesia has struggled to develop its rich energy resources, turning into a net importer of crude oil in recent years. To stem the steady decline in production, it has been offering new exploration rights and financial incentives for oil and gas fields. (Reporting by Muklis Ali; Editing by Sara Webb)
