Pertamina acquires Inpex Java

State oil and gas company PT Pertamina (Persero)through its subsidiary PT Pertamina Hulu Energi (PHE) has formally acquired 100% share of Inpex Java, Ltd (IJL). The closing of the acquisition was held in Tokyo on 30 September 2010, followed with the signing of a Share Purchase Agreement in Jakarta on 7 September 2010 between PHE and Inpex Corporation. Inpex Java, Ltd, is a company based in Japan that holds a 7.25% participating interest in Offshore North West Java (ONWJ) block and also owns 100% share of Inpex Sumatra, Ltd. that holds a 13.06744% Participating Interest on Offshore South East Sumatra (OSES) block.

This corporate action has assured PT Pertamina (Persero) ambition to meet its production target of up to 1 million BOEPD by 2015. ?This acquisition is part of corporate strategy in adding extra production and potential reserve of oil & gas, in order to achieve Pertamina?s production target of 1 million BOEPD by the year of 2015.? Explained Karen Agustiawan, Pertamina president, after the acquisition closing of Inpex Java, Ltd. in Tokyo, Thursday (30/9).

IJL was previously owned by 3 Japanese companies including Inpex Corporation (83.5%), Shoseki Overseas Oil Development Co. Ltd. (12.5%) and JX Nippon Oil & Gas Exploration Corporation (4%). IJL holds a 7.25% participating interest in Offshore North West Java (ONWJ) block and also owns 100% share of INPEX Sumatra, Ltd. that holds a 13.067444% Participating Interest on Offshore South East Sumatra (OSES) block.

In addition, Karen also explained that the acquisition has once again strenghtened Pertamina?s intention to manage and operate offshore blocks not only in domestic but also in overseas. It is expected also that the additional oil production will secure feed stock to Pertamina?s refinery in order to meet the national demand. Currently, oil from ONWJ is allocated for Cilacap refinery, while most of the oil production from OSES block supplies Balikpapan and Balongan refineries.

This acquisition will give additional boost to Pertamina?s oil and gas production. As stated by President Director of PHE, Dwi Martono that the oil production will increases about 7,400 barrel oil per day (BOPD) while the gas production will increase around 24.3 MMSCFD. ?The ONWJ block will contributes around 2,200 BOPD of oil and 15.3 MMSCFD of gas, while OSES block will add around 5,200 BOPD of oil and 9 MMSCFD of gas? said Dwi.

Dwi expects the acquisition will strengthen Pertamina?s grip over the ONWJ block. It is reasonable since Pertamina is now the majority owner by holding 53.25% participating interest in the ONWJ block (Previously, Pertamina owned 46% participating interest in ONWJ block through PHE ONWJ). In this regard, production performance can be optimized continuously. Since acquired by Pertamina, , the oil & gas production from ONWJ block has increased significantly from 22,000 BOPD to almost 28,000 BOPD in 2010. In fact, the production is targeted to increase by 16% to reach 31,000 bopd in 2011.

Currently the ONWJ block supplies gas for state owned fertilizing company PT Pupuk Kujang & Karawang which is located in Cikampek, West Java; power plant owned by State owned elictricity company (PT PLN), and PT Perusahaan Gas Negara. Meanwhile OSES blok supplies gas for PT PLN. Meanwhile, the oil produced from ONWJ block is sent to feed Cilacap refinery and the oil from OSES is sent to Balikpapan and Balongan refineries. (godang)