Indonesia’s Pertamina seen to continue tieup with PNOC-EDC

PT Pertamina of Indonesia is expected to continue next year its joint study agreement with PNOC-Energy Development Corp. (EDC), a ranking Pertamina official said.

Pertamina vice president for government and public relations Abadi Poernomo said they intend to pursue the agreement signed in 2003.

"This is a continuing effort under our memorandum of understanding (MOU). We plan to jointly undertake geothermal development projects in the Philippines and in Sulawesi Island. We are studying what we can do together," Poernomo said.

Poernomo added that the company is also looking at the possibility of supplying the Philippines with liquefied coal in the future. "The Philippines could be one of our offtakers for the product."

He said this technology is now being developed in Indonesia. "This could be a replacement for gasoline and kerosene. We are building the facility with 28 million barrels capacity. It will be operational by 2008," he said.

Pertamina is Indonesia’s state enterprise for oil, natural gas and geothermal exploration and development. EDC, on the other hand, is the geothermal development arm of the state-run Philippine National Oil Co. (PNOC).

EDC has been eyeing Indonesia as one of its potential clients for geothermal development.

In July 2002, an EDC evaluation team conducted with Pertamina a technical and economic assessment of three potential geothermal projects in Indonesia. Two of the prospective areas, Ulubelu and Lumut Balai are located in South Sumatra while the third geothermal prospect, Tompaso, is located in North Sulawesi.

The team conducted an extensive review of available information from Pertamina, site visits, sampling, assessment of existing infrastructure, market demand and supply analysis, review of the legal and fiscal framework and financial analysis.

Initial findings of the team, based on available preliminary data, show an estimated probable resource potential of 225 megawatts (MW) for Ulubelu, 300 MW for Tompaso, and 1,500 MW for Lumut Balai.

The estimated resource potentials, however, are subject to revisions pending the availability of results from laboratory testing of water, isotope and rock samples obtained from the project areas. Market and financial analyses have been encouraging and show that the development of the three project areas is highly feasible.

In mid-1996, with the slowdown of in-house and Philippine drilling activities, EDC’s Energy Drilling Division (EDD) saw the opportunity to open its doors to overseas contracts.

To realize its vision as a global player in the drilling industry, EDD organized a marketing team composed mostly of Drilling Division insiders.

The primary task for the group was to identify companies with drilling projects and participate in the drilling rig tender process. After over two years of sourcing out service contracts, two EDC drilling rigs left the country for Indonesia and Papua New Guinea to complement drilling contracts.