Govt studies Pertamina's planned acquisition of Repsol-YPF assets

The government is studying state oil and gas company Pertamina's plans to buy the Indonesian assets of Spanish-Argentinean oil and gas giant Repsol-YPF.

"The board of commissioners (of Pertamina) is studying the economics of the acquisition plans. If the board thinks it (the acquisition plan) profitable, then we may go ahead with efforts of seeking funds (for the acquisition plan)," board secretary Roes Ariawijaya told reporters on Monday.

He said Pertamina had proposed a budget of between US$150 and $200 million to finance the acquisition plans but he did not detail the assets Pertamina wants to buy.

He said the existing regulations obliged Pertamina to seek the government's approval for the acquisition plan.

Repsol-YPF has shares in seven production sharing contracts (PSC) in the country, that is the South East Sumatra, North West Java, West Madura, Polleng, Jambi Merang, Blora and South Sokang PSCs.

Repsol-YPF has reportedly selected Pertamina as a preferred bidder for the assets through an international tender last year.

Pertamina's president Baihaki Hakim earlier said Pertamina only wanted to buy the South East Sumatra PSC, which is now the country's largest offshore PSC with an output of more than 120,000 barrels per day (bpd). But, other Pertamina's officials said Repsol-YPF would only sell the assets in one package.

Repsol-YPF has said it wanted to sell its Indonesian assets because it would like to focus on North Africa and South America.

However, Roes questioned the real reason behind Repsol-YPF's divestment plan.

"Maybe, the company thinks the assets are no longer profitable production-wise. If the production of the assets is good, why do it want to sell them," Roes said. (Godang)