Pertamina, PTTEP acquire Hess?s subsidiaries in Indonesia

State-owned oil and gas firm PT Pertamina announced Monday that its wholly owned subsidiary, PT Pertamina Hulu Energy, jointly signed Share Purchase Agreements (SPAs) with PTTEP Netherlands Holding Cooperatie U.A.(a subsidiary of PTTEP) to acquire Hess's subsidiaries which hold 75 percent participating interests in Pangkah Block and 23 percent participating interests in Natuna Sea A Block.

Pertamina said in a statement that the acquisition is on a basis of 50:50 between Pertamina and PTTEP. Total transaction value for the acquisition is approximately US$1.3 billion. Completion of the transactions is subject to customary closing conditions as prescribed in the SPAs.

Pangkah Block is an oil field located in East Java Sea, Indonesia. The current production is approximately 7,000 barrels per day of liquids and 33 million cubic feet per day of gas, with total proven and probable reserves (2P) of 110 million barrel of oil equivalent (BOE). After the completion of the transaction, Pangkah Block will ultimately be jointly operated by Pertamina and PTTEP.

Meanwhile, Natuna Sea A Block is a gas field located in West Natuna Sea, near the border between Malaysia and Indonesia. The current production is approximately 145 million cubic feet per day of gas from Anoa Field, 75million cubic feet per day of gas from Gajah Baru field and 2,350 barrels per day of oil, with total proven and probable reserves (2P) of million 209 barrel of oil equivalent (BOE). The Partners in Natuna Sea A Block are Premier Oil (the Operator), KUFPEC and Petronas which hold participating interest of 28.67 percent, 33.33 percent and 15 percent, respectively.

The acquisition of Pangkah and Natuna Sea A is in line with Pertamina?s growth strategy to acquire more producing assets that provides an immediate addition to production and reserve hence increase the revenue. Moreover, it also strengthens Pertamina position as a backbone of Indonesia?s national energy security. Pertamina aspires to be a dominant upstream player in domestic by 2015 and to broaden its international footprints. By the year 2025, it is projected that Pertamina production will be about 2.2 million BOEPD that contributed equally from domestic and overseas operations.

Editing by Reiner Simanjuntak