Indonesia, Yemen to expand oil and gas cooperation

National Yemen

Indonesia, Yemen to expand oil and gas cooperation

Amahl S. Azwar

Indonesia, Southeast Asia’s main oil and gas producer, says it plans to expand its energy partnership with Yemen, an important country in the global oil trade.

Energy and Mineral Resources Ministry spokesman Saleh Abdurrahman said in Jakarta on Thursday that the government proposed to Yemen, an oil and gas producer in the Arabian Peninsula, that it invest in the oil and gas industry in Indonesia.

“We have offered oil and gas business stakeholders in Yemen to consider investing in both the upstream and downstream sectors in the country, including refineries, pipelines, exploration and CBM [coal bed methane] development,” he said. “The details of the plan are currently being discussed.”

The official was commenting on a recent visit by the Yemeni deputy Oil Minister Yousef Ahmed Musaeed, who met the Energy and Mineral Resources Ministry’s director general for oil and gas Edy Hermantoro in Jakarta earlier this week.

The meeting was a follow-up to a visit by the Yemeni Oil Ministry’s oil and gas chief Nada Mahmud Aman in February this year, in which the Yemeni delegation expressed interest in oil and gas development in Indonesia, including in regulation, gas trade and production-sharing contracts.

The Yemeni government, according to Saleh, also offered Indonesia, a former member of the Organization of the Petroleum Exporting Countries (OPEC), to invest in Yemen, but he declined to give further details pending future discussion.

Indonesia, the third-largest exporter of conventional liquefied natural gas (LNG) behind Qatar and Malaysia, is keeping an eye on unconventional gas, such as shale gas and CBM, to secure domestic supplies in the future.

In a statement delivered before the Yemeni delegation, Edy Hermantoro said that Indonesia sought to collaborate with Yemen, particularly in the gas sector, saying that the country was increasingly reliant on revenue from natural gas amid declining crude oil production.

Indonesia, through its state-owned oil and gas firm PT Pertamina, has offered Kazakhstan opportunities for cooperation in the LNG business, as part of further partnership in the oil and gas sector between the two countries.

Indonesia, which left OPEC in 2008 after becoming a net oil importer, currently produces around 830,000 barrels per day (bpd) of crude oil, much less than the 1.6 million bpd it produced back in 1995. Meanwhile, natural gas production is currently higher than crude oil production, at around 1,240,000 barrels of oil equivalent per day (boepd).

On the other hand, according to data compiled by The Jakarta Post, Yemen’s oil output in 2011 stood at 170,000 bpd, down from 259,000 bpd a year earlier.

While oil production in Yemen is estimated to have plummeted by 2017, the country has abundant natural gas reserves of around 18.2 trillion cubic feet. Yemen’s first LNG plant, with a production of 6.7 million tonnes per annum (MTPA), began operating in October 2009.

Afdal Bahaudin, the risk-management and investment-planning director of PT Pertamina, said that the firm was yet to have plans to expand its business to Yemen, but added that it currently still studied the country profile.

“If there is potential then surely we will jump at it,” he said.

Separately, Komaidi Notonegoro, an energy expert with the Jakarta-based ReforMiner Institute, applauded the government’s move to expand business cooperation with Yemen, which he said would trigger cooperation with other oil-rich nations in the region.

“The partnership will ease the government’s future expansion in the region, especially if it wants to increase cooperation with countries in the Middle East with large oil and gas reserves,” he said in a telephone interview.

In 2012, PT Medco Energi Internasional, the largest publicly listed oil and gas firm in Indonesia by production, acquired a 25 percent stake of participating interest in the Malik Block 9 in Yemen from Dubai-based Reliance Exploration & Production DMCC in a transaction worth US$90 million.