Indonesian Co., NIOC to Sign Oilfield Agreement

Indonesian Co., NIOC to Sign Oilfield Agreement
Indonesian Co., NIOC to Sign Oilfield Agreement

Indonesia's Pertamina expects to sign an agreement with Iran to evaluate investing in two oil and gas blocks sometime after the Ramadan holy period that ends in July, a company official said on Monday.

A deal would be Indonesia's first investment in Iran's upstream oil sector. Last month Pertamina inked an agreement to purchase 600,000 tons of liquefied petroleum gas from state-owned National Iranian Oil Company, Reuters reported.

Iran's oil and gas infrastructure has stagnated after years of international sanctions that were lifted in January and the country is seeking investment to boost its output.

Pertamina plans to sign a memorandum of understanding with state-owned NIOC to evaluate the two blocks and eventually import crude from the sites for processing in Indonesia if the bid is successful, Pertamina upstream director Syamsu Alam said. "We want to manage those blocks. We want to be operator in those blocks," Alam said in a phone call, without identifying the areas.

"Once the blocks are in full production, output could reach hundreds of thousands of barrels per day, but now they have not met that number yet. They're not mature yet."

Alam was commenting on statement earlier on Monday from an official at Indonesia's energy ministry that the Pertamina deal was the next step after an agreement between the governments of the two countries.

"The government to government agreement is done, now we're following up with a company to company deal," oil and gas director general Wiratmaja Puja said.

The announcement comes as Iran is about to launch new investment contracts for companies seeking to bankroll upstream projects in its oil and gas sector.

Some 135 companies including BP, Total, Italy's Eni and Spain's Repsol attended a conference in Tehran in November to hear about the Iran Petroleum Contracts.