Pertamina ties up with PetroChina

China?s oil company PetroChina signed an agreement on Sunday for broad cooperation with state-owned oil and gas company Pertamina, as China's biggest oil firm looks to further diversify outside its home borders.

The memorandum of understanding calls for four areas of cooperation, including onshore and offshore oil and gas exploration, Pertamina's president director Baihaki Hakim told Reuters in Beijing.

The business involved could reach more than US$100 million but talks were needed to flesh out the plans, he said.

Baihaki is part of a business delegation accompanying Indonesia's President Megawati Sukarnoputri, who arrived in China for an official visit on Sunday.

The agreement follows a deal in January for China's main offshore oil firm CNOOC to buy the Indonesian assets of Spanish oil giant Repsol-YPF, in its biggest international expansion to date.

Baihaki said Indonesia would offer 17 offshore and onshore blocks for tender for exploration this year, and the two companies aimed to select some for possible joint development.

"PetroChina is interested to collaborate with Pertamina in a few attractive blocks to explore together," he said shortly before a signing ceremony.

"They're very aggressive. They have money to invest in this one. They are not talking about pie in the sky," he said.

Under the agreement, PetroChina will offer technology to Pertamina for enhancing oil recovery.

Pertamina also hoped to increase downstream cooperation by selling more of its petrochemical products to China as part of the agreement, Baihaki said.

"In the past and currently, Indonesia, Pertamina, exports through traders in Singapore and also through Hong Kong," he said. "We'd like to bypass this.

We would like to sell directly to the downstream market in China." (*)