Indonesia's Pertamina withdraws bid to acquire US-based oil firm

Indonesia's state-owned energy firm PT Pertamina has decided to cancel its plan to acquire US-based oil and gas company Coastal Energy after-disagreement with Coastal's shareholders over the purchasing price of the assets, a top executive has said.

Pertamina president director Karen Agustiawan said yesterday the firm had decided to discontinue negotiations to purchase Coastal, which has assets in Thailand and Malaysia.

"Although the assets are good, its purchasing price is too high and does not match the value of the assets. [Hence] we withdraw," she told The Jakarta Post.

Pertamina's investment planning and risk-management director Afdal Bahaudin said that the company had begun a bidding process with the company's shareholders as part of Pertamina's plan to expand its business overseas.

Coastal Energy's biggest shareholders include billionaire Oscar S. Wyatt Jr., who owns around 26 per cent and Ingalls & Snyder LLC, which holds a 9.3 per cent stake, according to data compiled by Bloomberg.

Pertamina has announced expectations to see an additional oil output of 32,000 barrels per day (bpd) as a result of its plan to acquire five undisclosed oil and gas blocks abroad this year.

Coastal, currently produces more than 22,000 barrels of oil per day from its three foreign offshore oil fields in Thailand, according to the firm's official website.

The company owns and operates Block G5/43 and Block G5/50 in the Gulf of Thailand as well as varying interests onshore in northeast Thailand, including a 13.7 per cent of interest in the Phu Horm gas field.

Earlier in the year, Bloomberg cited Canada's Financial Post reports saying that in September Pertamina had expressed interest in "pursuing Coastal on its own and is prepared to pay a 15 per cent premium to Coastal's share price at, or around, US$23 per share or $2.6 billion."

Following the reports, Coastal said it "continuously evaluates strategic alternatives, including but not limited to the potential sale of the company, to maximise shareholder value. However, there can be no assurance that any transaction will occur."

Bahaudin had said that "too much information regarding the planned acquisition may shake the market, which would increase [Coastal's] stock price and burden the firm’s plans."