Indonesia's Pertamina To Sign First Upstream Deal With Iran

Indonesia's state energy company Pertamina will sign a deal to purchase a stake in an oil and gas block in Iran within a week, an official at Indonesia's energy ministry said. Iran's oil and gas infrastructure has stagnated after years of international sanctions that were lifted in January and is now in need of investment.

A deal would be Indonesia's first investment in Iran's upstream oil sector. Last month Pertamina inked a deal to purchase 600,000 tonnes of liquefied petroleum gas from state-owned marketer National Iranian Oil Co.

"The government to government agreement is done, so now (we're) following up with a company to company (deal)," Oil and Gas Director General Wiratmaja Puja told reporters, noting that a deal was expected before the end of the Muslim fasting month. The fasting month of Ramadan is expected to end on July 5.

Pertamina did not immediately respond to written requests for comment.

The announcement comes as Iran is about to launch a new investment contract for companies seeking to bankroll upstream projects in its oil and gas sector.

Foreign investors will be invited to bid for the new contracts in July, Iran's Deputy Oil minister Rokneddin Javadi said in May.

Some 135 companies including BP, Total, Italy's Eni and Spain's Repsol attended a conference in Tehran in November to hear about the Iran Petroleum Contract (IPC).

The IPC would end a buy-back system that dates back more than 20 years that bans foreign companies from booking reserves or taking equity stakes in Iranian companies.