Indonesia’s state oil firm Pertamina said on Thursday it was planning to revive oil projects it was involved in Iraq that were put on ice because of the security situation in the country.
Iraq and Pertamina signed an oil exploration agreement in block 3 in Iraq’s Western desert in 2002, but the US-led invasion of the Middle Eastern country prevented Pertamina from starting exploration.
Pertamina said at the time it had also been eyeing the Tuba oil field in Iraq.
“We used to have government-to-government projects in Tuba and the Western desert oil fields. We expect the projects to be revived,” Pertamaina president Karen Agustiawan told reporters after a meeting with Energy minister Purnomo Yusgiantoro.
Pertamina is under government pressure to increase oil production and has been looking to expand its overseas projects.
The company plans to produce 169,750 barrels per day of oil this year, up from 156,000 bpd of oil in 2008.
“We want Pertamina to have oil projects with Iraq because the reserves are huge there,” Evita Legowo, director of oil and gas at the energy ministry, said.
Despite its rich natural resources, Indonesia has turned into a net importer of crude oil in recent years as production slumped after a failure to tap new field fast enough.
Pertamina also joined first round bidding on six of Iraq’s largest producing oilfields and two gas fields this year but was not successful.
“We viewed the cost per barrel as uneconomical. Some of the oilfields that did not attract investors may be re-tendered but we will see the cost,” Agustiawan said.
In the first bid result announced early this month, only a BP-led group managed to secure a contract, for Iraq’s biggest oilfield, Rumaila. [nID:L131799]
The Iraqi government is hoping that a second major auction of oil and gas fields later this year will help revive a struggling oil industry where a first auction this week fell short, a government spokesman said.