JAKARTA, April 12 (Reuters) - Energy company Pertamina plans to explore for oil and gas in areas close toIndonesia's maritime border in the South China Sea to assert thecountry's territorial rights, the upstream director of thestate-owned company said.
"The government needs to have activities around the bordersand one of Pertamina's strategies is to support this," SyamsuAlam told Reuters in an interview on Monday.
He said Indonesia had lost sovereignty over two disputedislands in the past because it was not developing those areas.
"So, like the South China Sea and the borders in NorthKalimantan, we need to have some activities there," he said.
China claims 90 percent of the South China Sea, which isbelieved to be rich in oil and gas, with overlapping claims fromBrunei, Malaysia, the Philippines, Vietnam and Taiwan.
Its reclamation of rocky outcrops and development ofinfrastructure there has caused alarm around the region.Indonesia is not a claimant and has projected itself as anhonest broker in the dispute.
However, there is concern in Jakarta that Beijing believesits maritime territory - demarcated by a u-shaped nine-dash line- includes areas around the Indonesian-ruled Natuna islands.
After an incident last month involving an Indonesian patrolboat and a Chinese coastguard vessel and fishing boat in whatIndonesia said were its waters, Jakarta said it "felt sabotaged"in its efforts to maintain peace in the South China Sea.
China has said that it recognizes Indonesia's sovereigntyover the Natuna Islands.
Alam did not spell out Pertamina's plans for development inthe South China Sea, but asked about security, he said: "Ofcourse, we have to have support from the military." He did notelaborate on what role the military might play.
He said Pertamina has a three-year timeline for a technicaland commercial evaluation of the East Natuna gas field, workingwith Exxon Mobil, Thailand's PTT and Total.
The company also has interests in other blocks close toIndonesia's other border areas, he added, referring to theMasela and Babar Selaru blocks next to its border with Australiaand the Nunukan, Simenggaris and Ambalat blocks in areas next toMalaysia.
Indonesia and Malaysia have been embroiled in a long-runningdispute over the oil-rich Ambalat area, off Borneo, while thearea between Indonesia and East Timor and Australia containshuge gas reserves.
The International Court of Justice ruled in 2002 that theSipadan and Ligitan islands off northeastern Borneo belonged toMalaysia, based on evidence that Kuala Lumpur was doing more onthe islands to indicate its authority.
Alam said Pertamina has a budget of up to $2 billion formergers and acquisitions in oil and gas assets this year, and islooking to buy into projects in Iraq, Saudi Arabia and Russiaamong other countries.
Pertamina plans to increase output through mergers andacquisitions by 14,000 barrels of oil equivalent per day (boepd)this year, and by 117,000 boepd in 2017, he said.
Indonesia's crude production, which peaked in 1981, dippedbelow 1 million barrels per day (bpd) in 2011 and is set to falltowards 600,000 bpd by 2020. The country currently has less than13 years of reserves.
Among the assets Pertamina is eyeing domestically are theEast Kalimantan and Rokan oil and gas blocks operated by Chevron, whose contracts are due to expire in coming years.REUTERS
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