Pertamina Inks 35-Year Extension for Sahara Desert Oil Field

Indonesian national energy company Pertamina has signed a contract extension for managing one of the oil fields in the Sahara Desert in Algeria, according to a company news release.

Pertamina secured an extension for managing the Menzel Ledjmet Nord (MLN) block in Algeria on June 15 for the next 35 years. The extension “demonstrates the Algerian government's confidence in Pertamina's performance”, the company said. The oil field, located in the Sahara Desert, has been fully operated by Pertamina since May 2014 through its upstream subsidiary.

The MLN block can produce 35,000 barrels of oil per day and has 58 solar panels generating 1,141 kilowatt-hours (kWh) per year, resulting in an emission reduction of up to 7,507 tons of carbon dioxide per year, according to the news release.

The Algerian oil and gas block is one of the main contributors to Indonesia’s foreign oil production, according to Pertamina President Director Nicke Widyawati. "Acquiring oil and gas blocks overseas with the concept of 'bring the barrel home' is a strategic step for Pertamina to maintain national energy security", Widyawati said in the release.

Pertamina has also been granted permission to build a liquefied petroleum gas (LPG) plant with a capacity of one million metric tons per year. The products will be brought to Indonesia, Widyawati said.

"With this breakthrough, we hope to reduce LPG imports and strengthen Indonesia's trade balance", he added.

The MLN oil and gas block also has the potential for renewable energy development, particularly solar photovoltaic technology, which will be utilized as a green electricity supply for the block's operations, according to the release. "This is a concrete manifestation of Pertamina's strong commitment to reducing carbon emissions in all its activities following the ESG implementation", Widyawati said.

In June 2022, Algeria's state-owned oil and gas company Sonatrach made a massive new gas discovery that could hold as much as 12 trillion cubic feet of reserves, according to a company statement. The discovery was located in the Sahara Desert and is Algeria’s biggest discovery in the last 20 years, Sonatrach said.

State-owned Pertamina said that it is committed to supporting the Indonesian government’s net-zero emission target in 2060. The company is committed to increasing its renewable energy mix from 9.2 percent in 2019 to 17.7 percent in 2030.

In May 2022, Pertamina partnered with oil and gas major Chevron to explore lower carbon opportunities. Aimed at serving local and potentially regional customers, Chevron and Pertamina are considering novel geothermal technologies, carbon offsets through nature-based solutions; carbon capture, utilization, and storage (CCUS); as well as lower carbon hydrogen development, production, storage, and transport.

In November 2021, Pertamina and ExxonMobil inked a memorandum of understanding to evaluate low-carbon technologies in Indonesia. The companies agreed to assess the potential for technologies such as CCUS and low-carbon hydrogen. By jointly examining subsurface data, the companies expect to identify geologic formations deep underground that could be suitable to safely store carbon dioxide, and the potential for safe, commercially viable utilization of dioxide.

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