Pertamina needs political supports to expand businesses to Iraq

State oil and gas company Pertamina plans to expand its oil and gas exploration to Iraq to anticipate the depleting oil reserves in Indonesia. But this plans needs the government's political supports as Iraq is still under UN embargo.

Pertamina's development director Effendi Situmorang said that the company's exploration expansion plan to Iraq was in accordance with the mission of the company's restructuring to become a global oil entity.

"Last week, high ranking officials from Iraqi Foreign Ministry met with Pertamina directors. Iraq was open for our business expansion plan. Iraq's oil reserves are still promising. But, it all needs political supports from the Indonesian government for Pertamina.

"Next month, an Iraqi joint commission will come to Indonesia. Besides, discussing bilateral economic relations, the commission will also discuss our business expansion plan to Iraq," Situmorang said on Friday (Feb. 9) on the sidelines of "The Top Enterprises by country year 2000" award presentation by Asiaweek.

Situmorang said that the expansion plan had been initiated six years ago, but it could not be materialized until now because it needed a long negotiation.

He added that Pertamina would team up with local companies to establish a joint venture company to do oil exploration in Iraq. Under Law No. 8/1971 on Pertamina, Pertamina is not allowed to conduct oil exploration offshore, unless it is conducted through a subsidiary.

"Therefore, we needs to establish a subsidiary in which Pertamina controls majority stake, " he said. (*)