Indonesia's Pertamina said on Monday it expects to sign an agreement with Iran to evaluate investment in two oil and gas blocks in July.
A company official told Reuters the state-run firm plans to sign a memorandum of understanding with the National Iranian Oil Company to evaluate the blocks and eventually ship the crude produced at the site for processing at Indonesia's refineries.
Pertamina is also seeking to develop and manage the field, which, if successful, would be Indonesia's first investment in Iran's upstream sector.
"Once the blocks are in full production, output could reach hundreds of thousand of barrels per day, but now they haven't met that number yet. They're not mature yet," Pertamina's upstream director Syamsu Alam told Reuters in a phone interview without identifying the areas.
Alam's comments came on the same day when Indonesia's energy ministry described the Pertamina deal as "the next step" after the two governments signed an agreement for joint cooperation in the energy sector.
Iran has been trying to attract foreign investors to its ailing oil and gas sector, which despite its enormous reserves has lagged behind the rest of the world due to decades long economic sanctions.
In May, Pertamina inked an agreement to purchase 600,000 tonnes of liquefied petroleum gas (LPG) from Iran.