Pertamina, INOC to sign MoU on Iraq field development

By Bernard Loebs

PT Pertamina and Iraq National Oil Company (INOC) are set to sign a memorandum of understanding (MoU) next month allowing the former to operate Tuba block in oil-rich Iraq.

?Iraq?s energy minister is scheduled to visit Indonesia in June. We hope to sign the MoU during the visit. This is a G-to-G cooperation. We submitted a proposal (to operate the block) to the Ministry of Energy and Mineral Resources. The ministry then lobbied the Iraqi government,? Gigih Prakoso Soewarto, Vice President of Corporate Strategic Planning & Transformation at Pertamina, told Petromindo.com on Wednesday.

Based on studies conducted during the Saddam Hussein regime, the block is believed to have 10 billion barrels of P1 oil reserve and be capable of producing 400,000 barrels per day (bpd), he said.

Iraq applies a service contract system for its oil and gas industry, in which operators can receive fees in the form of oil. Pertamina will take the oil to Indonesia, he said.

In line with ?Indonesia Incorporate spirit?, he said, Pertamina will bring along state owned engineering firm PT Wijaya Karya (Wika) to handle engineering works in the block.

Earlier, it was reported that Pertamina were competing with three companies: namely, India-based Oil Natural Gas Corp., Algeria-based Algerian Sonatrach and China-based Chinese Petroleum for the service contract to operate Tuba. It remains unclear if Pertamina has won the bid.

According to Gigih, Pertamina is also interested in another block in the country, that is Western Desert 3 block, which is located 300 kilometers southwest of Baghdad and is estimated to contain three billion barrels of oil. However, for the moment, the firm will focus on Tuba block since it has come into production while Western Desert is still in exploration stage.

?It remains unclear if Western Desert has oil or gas,? he said.

Editing by Johannes Simbolon