EXCLUSIVE: Pertamina declared preferred bidder for Repsol-YPF assets

State oil and gas company Pertamina said it had been declared by Spanish-Argentinean oil and gas firm Repsol-YPF as the preferred bidder for all its assets in Indonesia.

"We have been declared the preferred bidder," head of Pertamina's foreign contractors management body (BPPKA) Heru Tjokro told Petromindo. Com on the sidelines of the yearend press conference Thursday evening.

Heru said Pertamina was forming a task force to study the value of the Indonesian assets of Repsol-YPF before submitting a price proposal for the assets.

"We are seriously studying plans to buy the assets because the purchase of the assets will determine the future of Pertamina," he said.

Pertamina's president Baihaki Hakim earlier told Petromindo that Pertamina was only interested to buy an about 10 percent stake in the South East Sumatra block, which is 65 percent owned and operated by Repsol-YPF.

But, according to Heru, Repsol-YPF would only sell its Indonesian assets in one package and interested buyers should buy all the assets rather than some parts of them.

Pertamina's sources said Pertamina is competing with Indonesian oil and gas firm Medco Energy Corp., Thai firm Thailand Petroleum Authority (PTT), Japanese firm Mitsui, South Korean firm Korean National Oil Company (KNOC).

Repsol, which acquired YPF in 1999, has said that it wanted to divest its assets in the United Kingdom and Indonesia to raise a total of US$2.5 billion to repay its debt and finance its expansion programs.

The divestment program was part of the company's plan to concentrate in North Africa and South America.

The company has appointed international financial firms Schroder Salomon Smith Barney (SSSB) and Waterous International Inc.

According to SSSB and Waterous, Repsol-YPF has seven production sharing contract (PSC) blocks in Indonesia, including four of the seven blocks, which are already in production, and three blocks, which are still in exploration phase.

The four production blocks are the South East Sumatra block, which is operated and 65 percent owned by Repsol-YPF; the North West Java block, which is 36.7 percent owned by Repsol-YPF and operated by American oil and gas company ARCO; the West Madura block, which is 25 percent owned by Repsol-YPF and jointly operated by Repsol-YPF and South Korean firm Kodeco; the Poleng block, which is 50 percent owned by Repsol-YPF and jointly operated by Repsol-YPF and Kodeco.

Repsol-YPF's contract on SE Sumatra will last until 2018, while contracts on North West Java, West Madura, Poleng expire in 2016, 2011 and 2013 respectively.

The company currently produces 150,700 barrels of oil equivalent per day (BOEPD), mainly from the South East Sumatra and North West Java blocks, according SSSB and Waterous.

The South East Sumatra block is currently the country's largest oil offshore producer with an output of 127,000 bpd. The block was owned by American firm Maxus Inc, before the company was acquired by Argentinean firm Yasciemento Petroliferos Fiscales (YPF) in 1995.

Repsol-YPF's assets, which are in exploration stage, are the Jambi Merang block, which is 25 percent owned and operated by the company; the Blora block, which is 16.7 percent owned by Repsol-YPF and operated by Coparex; and the South Sokang block, which is 45 percent owned and operated by Repsol-YPF.

Contract on the Jambi Merang block will last until 2019, while contracts on the Blora and South Sokang blocks expire in 2026 and 2028 respectively. (Alex)