EXCLUSIVE: Pertamina wants only 'small' stake in Repsol-YPF assets

State oil and gas company Pertamina said it was only interested to buy about 10 percent of Spanish-Argentinean Repsol-YPF's stake in the South East Sumatra Block in the Java Sea.

"We want to buy 10 percent stake in the block around the Pabelokan island," Pertamina's president Baihaki Hakim told Petromindo.Com on Thursday, referring the island which is used by Repsol-YPF as the logistical base for its operation of the South East Sumatra production sharing contract (PSC) block.

He made the statement on the sidelines of the ceremony to give aids to Aceh.

According to Pertamina's data, Repsol-YPF now holds a 65 percent stake in the block, which currently produces more than 120,000 barrels per day.

Repsol-YPF is now offering all Indonesian assets for sale as it has planned to concentrate in North Africa and South America.

Aside from the South East Sumatra block, the company also have stake in the North West Java block(36.7 percent); the West Madura block (25 percent); the Poleng block (50 percent), which are all in production; and the Jambi Merang block (25 percent), the Blora block (16.7 percent); and the South Sokang block (45 percent), which are still in the exploration phase.

Pertamina's source said Repsol-YPF had held an auction of the Indonesian assets two months ago in Argentina with bidders including Pertamina, Indonesian private oil and gas firm Medco Energy, Thai company Thailand Petroleum Authority (PTT), Japanese firm Mitsui and South Korean firm Korean National Oil Company (KNOC).

Schroder Salomon Smith Barney (SSSB) and Waterous International Inc supervised the auction.

Pertamina's financial director Ainun Naim earlier said Pertamina would use its internal resources and loan to finance the share purchase.

It remains unclear if Pertamina was allowed to buy only a small portion of the Repsol-YPF assets, but a Pertamina source said Repsol-YPF has thus far "favored" Pertamina despite the fact that its price proposal is low than those proposed by the others.

According Pertamina, the South East Sumatra block, which is thus far the country's largest offshore oil producing block, started production 1968 with IIAPCO as the operator. IIAPCO sold its shares to Diamond Sham Rock in 1987, which sold its shares to American firm Maxus two years later.

Argentinean state-owned firm Yasciemento Petroliferos Fiscales (YPF) controlled the block in 1995. In 1999, the control of the block was transferred to Repsol-YPF following the merger of Repsol and YPF that year. (Godang)