State-owned oil and gas firm PT Pertamina is finalizing plans to acquire Exxon Mobil Corp.'s upstream and downstream assets in Aceh, Sumatra, Indonesia as it expand operations to ensure gas supply to a local fertilizer company, a senior company official said, as quoted in local media Jakarta Globe Monday.
The U.S. major is understood to be interested to sell its 100 percent stakes in both the aging B Block and North Sumatra Offshore (NSO) Block as production has declined steadily to around 2,000 barrels of oil and 50 million standard cubic feet per day currently. ExxonMobil's rights over these two blocks are scheduled to expire in 2018.
Despite falling production from these blocks, Pertamina President Director Dwi Soetjipto is confident that the company could triple production from the proposed acquisitions.
"We will simplify operations in (Aceh) and integrate the upstream and downstream activities," Dwi commented without revealing the cost of the deal as both companies are still finalizing the transaction.
Meanwhile, Pertamina is also keen to purchase from ExxonMobil a 30 percent stake in PT Arun Natural Gas Liquefaction as part of the deal, with the former already holding a 55 percent interest, while the remainder is held by a joint venture firm Japanese-Indonesia LNG Company.
According to Jakarta Globle, the proposed transaction has been approved by Indonesia's upstream oil and gas regulator SKKMigas, which believed that Pertamina's acquisition would help ensure gas supply to local fertilizer maker Pupuk Iskandar Muda, spokesman Elan Bintoro said, adding that ExxonMobil is likely to officially hand over operation to Pertamina in October.
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