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Pertamina Allocates $3.1B to Develop Upstream Projects in 2013

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Pertamina Allocates $3.1B to Develop Upstream Projects in 2013

State-backed Pertamina announced late Thursday that it plans to allocate $3.1 billion for its upstream projects in 2013 – which accounts for 46 percent of its total investment budget – as it seeks to strengthen the country's energy infrastructure.

Pertamina's massive upstream budget is in line with the Indonesian government's ambitious aim to boost the country's oil production output to one million barrels per day (bopd) by 2014, alongside with a separate target to maintain the volume until 2025. The figure was acknowledged by Pertamina in an Oct. 29 private press conference (attended by Rigzone) in Singapore.

The government-supported company will be focusing most of its efforts into developing its West Madura Offshore block in East Java next year. When the firm first took over the block, production was only 13,000 bopd, half of its peak production. But Pertamina is looking to quickly turn things around – aiming to increase output from the block to 16,000 bopd by the end of this year – as it ploughs investment dollars into developing the block.

Speaking about the company's ambitions, Pertamina's Director of Upstream operations Muhamad Husen told reporters Oct. 29 that the block will see a slate of 60 wells being drilled over the next two years.

Pertamina has also made its first foray into Algeria, through the acquisition of an Algerian unit of ConocoPhillips, which owns participating interests in several oil and gas blocks in the African nation. The announcement of Pertamina's acquisition of ConocoPhillips oil and gas assets in Algeria – worth $1.75 billion – was disclosed on Tuesday in separate statements released by both of the companies.

Pertamina revealed on Tuesday that the acquisition – anticipated to close by mid-2013 – will be funded through a bonds issue made earlier in May, which raised the company some $2.5 billion.

ConocoPhillips Algeria holds interests in three major onshore fields in Block 405a: Menzel Lekmat North (65 percent), Ourhoud (3.7 percent), and EMK (16.9 percent). ConocoPhillips said in a statement that its 2012 net production from the fields averaged 11,000 barrels of oil equivalent per day through October, and the net carrying value of its Algerian assets was around $850 million Oct. 31.

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