JAKARTA -Indonesian state-owned oil and gas group Pertamina will increase cooperation with Malaysian counterpart Petroliam Nasional, or Petronas, in an agreement signed on Tuesday that ranges from exploration to renewable power.
The comprehensive deal comes as demand for oil and gas is expected to remain high in Southeast Asia.
Both parties will “explore the possibilities of cooperation from upstream to downstream,” Pertamina said, including research and development, oil and gas exploration studies — especially in technology to develop blocks with high carbon dioxide content — as well as renewable energy.
The scope of cooperation will go beyond their respective home countries, such as oil refining in East Asia and joint exploration of business opportunities on other continents. Both companies also will begin the exchange of crude oil developed in their respective countries, a move that could reduce procurement costs.
The agreement comes a month after private-sector Indonesian oil and gas company Medco Energi Internasional announced a deal to purchase British peer Ophir Energy for 390 million pounds ($510 million), positioning itself to take on top player Pertamina by increasing output in Southeast Asia.
Indonesia’s latest energy policy calls for oil to account for 20% of the country’s energy mix, while gas contributes 24%.
When Petronas was founded in 1974, it was modeled on Pertamina, formed six years earlier. But Petronas has since outgrown its teacher, becoming one of Malaysia’s most profitable enterprises and contributing billions of dollars annually to government coffers.
The Malaysian company ranked 191st in Forbes Global 500 list of companies, with revenue of $52 billion in 2017, while Pertamina generated $42 billion, ranking in 253rd.
Pertamina’s finances likely took a hit in 2018 as the government tried to keep prices of subsidized gasoline low ahead of Indonesia’s upcoming presidential and general election in April. The state-owned company shouldered the additional cost from higher oil prices.
The agreement comes a month after major Indonesian oil and gas company Medco Energi Internasional announced a deal to purchase British peer Ophir Energy for 390 million pounds ($510 million), positioning itself to take on top player Pertamina by increasing output in Southeast Asia.
Source: Nikkei Asian Review