"There should be a competitor to Pertamina."
Jakarta (ANTARA News) - An economist has suggested that the government form another state-owned oil and gas company as a rival of PT Pertamina in an effort to improve the latter`s performance.

"The presence of another state-owned oil and gas company will encourage Pertamina to become more competitive and improve its performance which will in turn expand the national oil and gas sector," Ichsanuddin Noorsy said in a public discussion on "Oil and Gas Sector for National Prosperity" here on Wednesday.

He said Indonesia should follow the example of China which has three state-owned enterprises engaged in the oil and gas sector.

He argued that Pertamina got used to the absence of competition for a long time which has reduced its competitiveness.

"There should be a competitor to Pertamina, so the two SOEs will compete with one another to be the best. Moreover, it takes only three to six months to set up a new oil and gas company," he stated.

Earlier, on Tuesday, Pertamina announced that it had signed a sales and purchase agreement (SPA) to acquire the Algerian unit of the Texas-based energy company ConocoPhillips.

Pertamina president director Karen Agustiawan said the acquisition would allow the company to take over North ConocoPhillips Algeria Ltd`s stake in Block 405A in the North African country.

Block 405A comprises three main oil fields, namely Menzel Lejmat North, Ourhoud and EMK.

North ConocoPhillips Algeria currently has a 65 percent participating interest in Menzel, of which the firm is also the operator. The company, a subsidiary of ConocoPhillips, owns a 3.7 percent and 16.9 percent stake in the Ourhoud and EMK fields respectively.

This year, Block 405A has produced 35,000 barrels of crude oil per day, of which 23,000 barrels of oil per day go to ConocoPhillips.

"The acquisition is expected to boost Pertamina`s oil output significantly from 23,000 barrels of crude oil per day to 35,000 barrels of oil per day in 2013 as the EMK field is projected to begin its production," Karen said.

However, Karen declined to reveal the total investment for the plan as negotiations were ongoing.

Pertamina, which also has the chance to increase its reserves by 100 million barrels of oil from the purchase, expects the acquisition process to be finished in the first half of 2013.

Currently, the planned acquisition is still dependent on the Algerian government-owned oil company Sonatrach, which is the partner of ConocoPhillips at the block, and has the first right of buying stakes.

In addition, Pertamina is also waiting for the agreement of the Algerian government before finalizing the planned acquisition.

"We are ready to form a strong, close partnership with Sonatrach in a bid to maximize the output from the oil block," Karen said.
(Uu.Y012/KR-BSR/S012)

Editor: Priyambodo RH
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