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Wednesday, November 15, 2006

Jakarta may take over Pertamina's geothermal areas

JAKARTA, Nov 14 (Reuters) - The Indonesian government plans to take over 15 geothermal working areas from Pertamina in 2010 if the state oil and gas firm does not develop the projects and tender them to other companies, a mines and energy ministry official said on Tuesday.

A lack of investment and uncertainty over government regulation has caused difficulties for Pertamina in developing the projects, located on the islands of Sumatra and Java, the company has said.

Pertamina has 142 megawatts (MW) of geothermal power plants in Kamojang, West Java, and plans to expand to 900 MW by 2010.

"The government will tender the geothermal areas to other companies if Pertamina does not develop the projects by 2010," ministry official Sutisna Prawira told Reuters.

Pertamina upstream director Sukusen Soemarinda said the firm was seeking partners to develop geothermal projects.

"Chevron has shown interest to co-operate with Pertamina in developing geothermal projects. We plan to discuss (this) with them," Soemarinda said.

U.S. energy major Chevron Corp. currently has about 520 MW of geothermal power plants, located in West Java.

Geothermal power plants use hot water or steam from beneath the earth's surface to generate electricity.

Indonesia, dotted with hundreds of active and extinct volcanoes, has estimated potential to produce 27,000 MW of electricity from geothermal sources.

Indonesia, Asia Pacific's only OPEC member, is also the world's largest exporter of liquefied natural gas (LNG) and has huge coal deposits.

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