Indonesia has received a long- term commitment from Iraq to supply the Southeast Asia's largest economy with unlimited amount of crude oil, which is expected to smooth Indonesia's plague of dwindling oil output, local media reported Tuesday.

The report quoted Susilo Siswoutomo, deputy minister of energy and mineral resources who visited Iraq last week, as saying that there was a discussion on making the partnership last 50 years.

Susilo said Indonesia's state-owned energy firm PT Pertamina had signed a deal to secure a crude oil supply amounting to 65,000 barrels per day.

He added that Indonesia intended to source its crude oil supply for future oil refining facilities from Iraq.

"Indonesia could get 300,000 barrels of oil per day from Iraq just for the first stage of refinery development," he was quoted by Jakarta Globe as saying.

"Moreover, the Iraqi government also wants to participate in refinery development in Indonesia through acquiring some interest, " said Susilo.

Indonesia has striven to raise its oil production, which has dwindled in recent years due to aging wells and lack of fresh investment. Its oil output reached 826,000 barrels per day last year, while demand stood at 1.3 million barrels.

The country's proven oil reserve is 4,303.1 million stock tank barrels (MMstb), with potential reserve estimated at 3,695.49 MMstb, along with a proven gas reserve of 107.34 trillion standard cubic feet (TSCF) and a potential gas reserve of 52.29 TSCF, according to oil and gas watchdog BPMigas.

There are six major oil refineries with a combined capacity of 1. 1 million barrels per day, which is unable to meet domestic demand.

PT Pertamina used to import up to 11 million barrels of oil- based fuel per month in order to catch up with domestic demand, according to Hanung Budya, Pertamina's marketing director. The importation have weighed on Indonesia's fiscal health, leaving the country a trade deficit last year and pressure on local currency against the US dollar.

To cut the amount of imported fuel, the government has planned to construct three more oil refineries, each with a capacity of processing 300,000 barrels of oil per day, with two of them to be built by Pertamina.