"If we cannot afford to purchase the shares, why it should be continued."
Jakarta (ANTARA News) - State-owned oil and gas company PT Pertamina stated that it had canceled a plan to acquire a 15 percent stake in the US-based oil and gas company Coastal Energy.

"We canceled to buy the shares of Coastal Energy since we don`t agree with their offering price," Pertamina Vice President of Communication, Ali Mundakir, said at the Ministry of Energy and Mineral Resources here on Wednesday.

Mundakir stated the cancellation of the acquisition plan had been decided by the management of Pertamina.

"By canceling the acquisition of Coastal Energy, Pertamina has adopted the principles of prudence in making any decision," he said.

He also admitted the acquisition was actually still in the bidding stage so there was no binding agreement between the two companies.

The state-owned company had planned to buy 15 percent of Coastal Energy`s shares for US$2.6 billion, or about US$23 per share.

"If we cannot afford to purchase the shares, why it should be continued," Mundakir said.

Previously, Director of Investment Planning and Risk Management of Pertamina, Afdal Bahaudin said the company was seeking to acquire Coastal Energy in a move to expand its business overseas and increase oil production.

"Pertamina has to bid to the majority shareholders. Then, whoever wins the tender should meet the remaining stock holders," he said.

Bahaudin also stated the firm had submitted its proposal to purchase Coastal Energy, which is listed at the Toronto Stock Exchange and has assets in Thailand and Malaysia.

Coastal Energy, established in 2004, owns 100 percent of oil and gas blocks in the Gulf of Thailand and four concessions in the territorial waters of Northern Thailand. Coastal also has a 13.7 percent stake in oil and gas
company Hess Corp.

Coastal Energy actually owns a 13.7% working interest in the Hess-operated asset Sinphuhorm through APICO. Sinphuhorm is an onshore gas field in Northern Thailand.

Until June 2012, Coastal`s total production reached 21,714 barrels per day, an increase compared to the beginning of the year which only reached 9,494 barrels per day.

Editor: Priyambodo RH
Copyright © ANTARA 2012