Pertamina talks East Natuna after financial boost

JAKARTA, August 25, 2016 – Pertamina aims to sign a production-sharing contract with ExxonMobil and Thailand’s PTTEP for the East Natuna gas block, the senior vice-president for upstream strategic planning and operations evaluations for Indonesia’s state-run energy firm said today.

The area in question, located in the Natuna Islands in the Riau Islands province, is thought to hold proven gas reserves of 1.3 tcm (46 tcf), making it one of the world’s largest reserves of untapped gas. Reports have forecasted costs of around USD 20 billion-40 billion to develop the site.

Ownership of the area is disputed by Beijing, which has stated that the 8,3000-square-metre Natuna exclusive economic zone in the South China Sea is included within China’s borders.

The announcement comes at the same time as Pertamina signs another gas agreement with Pavilion Energy to develop small-scale LNG projects in Southeast Asia, as well as marketing, trading, procurement and investments of LNG.

Pertamina has seen extreme growth in the first half of this year, reporting a 221% rise in year-by-year profits. In the first half of 2015, the firm made USD 57 million in net profits, and in the first half of 2016, booked a total of USD 1.83 billion. However, even with this rise in profits, the company recorded a decline in revenue, from USD 21.8 billion in the first half of 2015 to USD 17.2 billion in the same period this year, a decrease of 21%. The president director of Pertamina, Dwi Soetjipto, stated that the drop was due to low oil prices affecting the industry.

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