BP eyes fuels business in the country<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
BP Indonesia is planning to enter the country's fuel retail
\nbusiness, posing a challenge to state oil and gas company
\nPertamina that has monopolized the sector for decades.<\/p>\n
Ministry of Energy and Mineral Resources official Erie
\nSoedarmo said the subsidiary of Anglo-American energy giant BP
\nhad applied for a retail license, which the government was now
\nprocessing.<\/p>\n
\"The government will issue a temporary license first for a
\nperiod of up to two years depending on the investment,\" Erie said
\non Tuesday.<\/p>\n
A permanent license would be awarded to BP if the company
\nshowed it had a long-term interest in the business, Erie said.<\/p>\n
BP officials were not available for comment.<\/p>\n
BP has been long active in the country's \"upstream\" fuel
\nprospecting and extraction sector, with projects including the
\nTangguh liquefied natural gas (LNG) plant in the Bird Head's area
\nof Papua -- the third LNG plant in the country. However, like
\nother oil retailers, it is barred from entering the \"downstream\"
\nretail sector, where state monopoly Pertamina has had monopoly
\nrights for decades.<\/p>\n
In 2001, the government issued new oil and gas laws, which
\nwould allow foreign investors to process crude oil, and import
\nand distribute fuel once Pertamina ended its monopoly next year.<\/p>\n
Pertamina will also face a challenge from Malaysian energy
\ngiant Petroliam Nasional Berhad (Petronas), which announced its
\nplan to enter the business last year, pledging to invest US$100
\nmillion a year to develop its gas station network in the country.<\/p>\n
Investors must file applications with the ministry, while
\nlicenses are issued by the Downstream Oil and Gas Supervisory
\nBody (BPH Migas).<\/p>\n
BPH Migas has issued preliminary approvals for six companies
\nto start downstream businesses here. The companies are PT Sigma
\nRancang Perdana, PT Pandu Selaras, PT Elnusa Petrofin, PT Elnusa
\nHarapan, PT Raven Sejahtera and PT Krida Petragraha, which is a
\nRoyal Dutch\/Shell Group unit.<\/p>\n
Meanwhile, the government is scrambling to complete the
\ndrafting of regulations governing the retail sector. Top
\nofficials are reportedly divided over several issues, including
\nwhether big companies, such as BP and Petronas, will be allowed
\nto own fuel stations here or will have to enter into partnerships
\nwith local small and medium enterprises (SMEs) and cooperatives.<\/p>\n
Some politicians have reportedly pressed the government to
\ninsert partnership clauses in the draft regulations.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bp-eyes-fuels-business-in-the-country-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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