Pertamina Acquires Algeria's 405A Oil Block Worth US$1.7 B

Jakarta, Nov 28 (Antara) - State-owned oil and gas company PT Pertamina has acquired Algeria`s Oil Block 405a, worth US$1.7 billion, according to its President Director Karen Agustiawan here on Thursday. Agustiawan said in a press statement that the acquisition of Algeria`s major oil block would provide Pertamina with a large volume of high-quality crude. "This step represents a key milestone in Pertamina`s international upstream business expansion," she stated. Pertamina officially gained ownership of Algeria`s Block 405a after concluding a purchase transaction in Algeria with ConocoPhillips Algeria Limited. Block 405a consists of three main oil fields: Menzel Lejmat North (MLN), Ourhoud and EMK. After the acquisition, Pertamina controlled 65 percent of the participating interest (PI) in the MLN field, acting at the same time as the operator. In the Ourhoud and EMK oil fields, Pertamina owns a 3.7 percent and 16.9 percent PI respectively. However, Pertamina does not act as the operator for these two oil fields. The total production of Block 405a reaches 35 thousand barrels per day. After the acquisition, Pertamina`s share in the block`s oil production reached 23 thousand barrels per day. Pertamina`s oil production from Block 405a will increase to 35 thousand barrels per day when the EMK field begins to produce oil. The oil production from Block 405a will be transferred to Pertamina`s oil-refinery plants. Oil reserves for Pertamina in the block are predicted to exceed 100 million barrels. The net assets of ConocoPhillips Algeria Ltd on October 31, 2012, stood at US$850 million. In the meantime, Pertamina Geothermal Energy (PGE), a subsidiary of Pertamina, has also signed the principles of agreement (PoA) with Chevron Geothermal Indonesia Ltd and Star Energy Geothermal Pte Ltd to develop six geothermal power plants in the country. PGE spokesman Hendi Suhendi pointed out on Wednesday that the agreement was signed in Jakarta on Tuesday. "With the PoA, all sides have agreed to cooperate to develop a financial model and work schedule for the geothermal projects," he added. Four of the six projects---Hululai, Tambang Sawah, Sungai Penuh and Semurup---will be developed in cooperation with Chevron, he stated. Star Energy will develop units 1, 2 and 3 of the Karaha Bodas geothermal power plant, he added. "Chevron and Star Energy were earlier PGE`s joint operation contract partners," he explained. Star Energy was PGE`s joint operation partner for the Wayang Windu project, while Chevron was the partner for the Gunung Salak and Darajat projects, Hendi remarked. The Hululais project in Bengkulu, the Sungai Penuh project in Jambi and the Karaha Bodas project in West Java are part of the second phase of the fast track program (FTP-2), he pointed out. According to Energy and Mineral Resources Ministry Regulation No. 21/2013, the Hululais project will have a capacity of 2x55 MW, while the Sungai Penuh project will have a capacity of 2x55 MW. Unit 1 of the Karaha Bodas project will have a capacity of 30 MW, while units 2 and 3 will have a capacity of 55 MW each. The FTP-2 projects cover 76 units with a combined capacity of 17,918 MW. Seventeen units with a capacity of 5,749 MW will be developed by the state electricity company PLN, while 59 units with a capacity of 12,169 MW will be developed by independent power producers (IPP). Unit 1 of the Patuha geothermal power plant, with a capacity of 55 MW in West Java, is expected to become the first FTP-2 project to start operations.