Indonesia’s Pertamina encouraged to invest in Azerbaijan’s oil and gas projects
By Nazrin Gadimova
The government of Indonesia has encouraged the country’s state oil and gas company Pertamina to invest in Azerbaijan’s oil and gas projects.
The government, being aware that domestic oil reserves is limited, urged Pertamina to manage oil and gas blocks abroad, including in Azerbaijan, an energy-rich Caspian littoral state.
Wiratmaja Puja, Energy Ministry’s Director General for Oil and Gas Affairs, believes that operational and production costs in Azerbaijan are reasonable, local media reports.
“Potential oil supply from this country is more than 50 million barrels,” he said, adding that Pertamina could adopt Petronas’ experience, Malaysian oil and gas company that has acquired a stake in Azerbaijan’s Shah Deniz gas field.
Puja further added that Azerbaijan produces 800,000 barrels of oil per day. “This is comparable to the volumes produced in Indonesia, however, the difference is that Azerbaijan has a much smaller population. Daily consumption here is only 200 million barrels; the rest is exported, while Indonesia does not produce enough oil to cover the domestic demand,” he added.
Indonesia has been importing crude oil directly from Azerbaijan since 2015, which opens up great opportunity for Pertamina to acquire stakes in oil and gas blocks here.
Country’s Energy Minister, Sudirman Said also confirmed that Azerbaijan monthly supplies to Indonesia about one million barrels of oil.
Pertamina representatives have already supported the initiative of country’s energy ministry, noting that oil can be supplied from Azerbaijan to the Indonesian Cilacap refinery.
In mid 2015, the Indonesian delegation visited Baku to mull energy cooperation and consider opportunities for the joint work with energy-rich Azerbaijan, which enjoys great experience in the oil and gas industry.
Azerbaijan's proven crude oil reserves were estimated at 7 billion barrels in January 2014, according to the Oil & Gas Journal . Azerbaijan's proven natural gas reserves were roughly 35 trillion cubic feet (Tcf) as of January 2014.
The country's largest hydrocarbon basins are located offshore in the Caspian Sea, particularly the Azeri-Chirag-Guneshli (ACG) bloc of fields, with oil reserves of nearly one million tons, and in the gas condensate field Shah Deniz, with proven gas reserves of 1.2 trillion cubic meters
The country produces three grades of crude oil—the SOCAR-produced barrels, Azeri BTC, and Azeri Light, and Urals.
The trade between Azerbaijan and Indonesia is mostly related to the energy sector, as Azerbaijan emerged as the second biggest supplier of crude oil to Indonesia after Saudi Arabia.
The bilateral trade between Azerbaijan and Indonesia reached $101 million in 2007 and increased to around $5 billion in 2015. The trade balance is heavily in favor to Azerbaijan, as the trade volume mainly dominated by Indonesian imports for Azerbaijan's oil.
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Nazrin Gadimova is AzerNews’ staff journalist, follow her on Twitter: @NazrinGadimova
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