Pertamina eyes Iraq after Venezuelan failure

JAKARTA. Indonesia’s state-owned oil and gas company, PT Pertamina, says the firm will continue to expand its upstream business overseas, in countries like Iraq, despite its recent failure to acquire oil-rich Venezuela’s Petrodelta SA from New York-listed Harvest Natural Resources Inc.

Pertamina’s investment planning and risk-management director, Afdal Bahaudin, told The Jakarta Post on Monday that the second-largest oil producer in the country would keep on searching for producing onshore oil fields available to purchase in a bid to boost its output.

“Pertamina will exercise every available opportunity abroad. However, everything will depend on studies, including the commercial, legal and technical aspects,” he said in a text message.

Afdal was commenting on Pertamina’s recently failed bid to acquire a 32 percent stake in Petrodelta from Harvest, which, according to the US-based firm in its official statement, has been scrapped by the Indonesian government.

In June last year, Pertamina signed an agreement to buy Harvest’s stake at Petrodelta in a transaction reportedly valued at US$725 million.

Had the acquisition gone ahead as planned, Petrodelta would be 60 percent owned by Venezuela’s state-owned company, Petroleos de Venezuela SA (PDVSA); 32 percent by Pertamina; and 8 percent by Vinccler O&G Tech, a Venezuelan company.

Pertamina president director Karen Agustiawan said last year that the firm was hoping to boost its oil output with the acquisition.

Last week, however, Harvest president and CEO James A. Edmiston said the plan had been terminated after the Indonesian government, in its capacity as sole shareholder of Pertamina, opted not to approve the transaction.

“While we are disappointed that the sale of our interests in Petrodelta to Pertamina was not approved by Indonesia, Harvest remains committed to exploring all possible alternatives to unlock the potential of our assets and to maximize value for our shareholders,” he said in a statement.

Indonesia’s State-Owned Enterprises Minister Dahlan Iskan said last weekend that the government had terminated the plan as Harvest had demanded twice the amount of investment from Pertamina before the deal could be sealed.

He added, however, that the government would still be keen for Pertamina to take over the stake “as long as [Harvest] goes back to the original agreement”.

Speaking before reporters on Monday, Karen said that Pertamina would look at other options to acquire overseas oil blocks such as in Iraq, whose Deputy Energy Minister Hussain al-Shahristani she met last year to discuss the possibility of acquiring stakes in the country.

“We may have the chance to work with [France-based] Total there,” she said.

Last year, Pertamina also planned to buy a stake in Canada-based Coastal Energy, which has assets in several regions in Southeast Asia. Pertamina ultimately withdrew the plan following a disagreement over the purchasing price of the stake.

In December, Pertamina signed an agreement with US-based ConocoPhillips to purchase the New York-listed firm’s Algerian unit, North ConocoPhillips Algeria Ltd., in a transaction reported to be worth $1.75 billion. (Amahl S. Azwar/ The Jakarta Post)