Indonesian crude trade drops as crisis hits<\/p>\n
SINGAPORE (Reuters): OPEC member Indonesia has reduced its
\nexports of crude oil for February for the third month in a row,
\nreflecting the country's aim of relying more on domestic crude
\nand limit imports in the face of financial problems, traders said
\nyesterday.<\/p>\n
Since December, the monthly export volumes of crude oil
\nallocated by Indonesian state oil company Pertamina has fallen
\nsteadily.<\/p>\n
Of its three main crudes, Pertamina allocated for export in
\nFebruary just 7,000 barrels per day (bpd) of Minas, but no Widuri
\nor Cinta.<\/p>\n
This compares with around 50,000 bpd of Minas and more than
\n20,000 bpd of Widuri and Cinta that were allocated monthly for
\nmost of last year.<\/p>\n
Pertamina's attempts in January to sharply cut exports were
\nmet with objections from affiliates and term buyers, forcing the
\nstate oil company to issue more exports.<\/p>\n
Pertamina finally allocated 30,000 bpd of Minas and 11,000 bpd
\nof Widuri and Cinta for January -- still less than average.<\/p>\n
But the affiliates and term buyers said they doubted crude
\nexports would be much higher for February, as Indonesia tries to
\npush as much domestically produced crude through to its own
\nrefineries and at the same time limit the drain on its foreign
\nexchange reserves by cutting imports.<\/p>\n
But they added that it was difficult to get firm information
\nabout imports into Indonesia, a member of the Organization of the
\nPetroleum Exporting Countries (OPEC) which produces around 1.4
\nmillion bpd.<\/p>\n
\"Officially, there is no change in imports. But in reality, I
\nthink it is lower,\" said one affiliate of Pertamina.<\/p>\n
Indonesia has been one of countries worst hit by the Asian
\ncrisis. The rupiah has fallen 71 percent since July 1, 1997 to
\nFriday's current trading level around 8,500.<\/p>\n
That means it has to pay more than 240 percent more for any
\ncrude and oil product imports that it did before the crisis began
\nlast July.<\/p>\n
Earlier this week, in a move to restore investor confidence,
\nIndonesian President Soeharto announced a sweeping reform package
\nthat included a cut in fuel subsidies and wide revisions in the
\n1998\/199 budget.<\/p>\n
Soeharto also scaled down the country's economic growth to
\nzero in the fiscal year starting April and projected inflation at
\n20 percent.<\/p>\n
\"The Indonesian situation is very worrying. Everyone is
\nwatching it very closely,\" said a trader with a major oil
\ncompany.<\/p>\n
\"I'm sure that the financial problems will affect their crude
\nimports,\" he added.<\/p>\n
One senior official at Pertamina said that the state oil
\ncompany had not changed its policy on crude oil imports. But with
\nspot prices of products being so low, its policy was being driven
\nby the economics of importing products versus crude, he said.<\/p>\n
He said as middle distillate prices were at 10-year lows and
\nthat crude had not fallen so fast, it made sense to import middle
\ndistillates.<\/p>\n
\"Product prices are quite low in Singapore,\" he said. \"It's
\ncheaper to import products now.\"<\/p>\n
Indonesia, Asia's second largest crude producer, imports
\naround 200,000 bpd of crude oil currently.<\/p>\n
The imports are partly regional light crudes from Australia
\nand Malaysia, and West African crudes, mainly from western
\ntraders such Vitol, Glencore and French major Elf.<\/p>\n
Indonesia also imports Middle East crudes, through term
\ncontracts with producer countries, traders said.<\/p>\n
But shipbrokers said that it was difficult to track the number
\nof ships moving into Indonesia as a large portion is on long-term
\ncharters which are not reflected in shipping fixtures.<\/p>\n
So it was almost impossible to tell if the volumes of crude
\ngoing into Indonesia has actually declined, they said.<\/p>\n
\"There has to be some impact (from the financial crisis). We
\nhave seen a fall in Pertamina's buying, but to a limited degree,\"
\nsaid a western crude trader who sells regularly to Indonesia.<\/p>\n
\"But I don't know about other term contracts that Pertamina
\nmay not have performed on,\" he added.<\/p>\n
Some traders said that reduced imports into Indonesia may
\nbecome more obvious in February, when the effects of the crisis
\ndeepens.<\/p>\n
\"We hear that Indonesia has bought just two or three 600,000-
\nbarrel cargoes of regional crudes for February. Usually they buy
\nfive cargoes each month,\" said a trader with a major oil company.<\/p>\n
\"Indonesia will continue importing. But it won't be at the
\nrate that they've been doing six or eight months ago,\" said one
\ncrude oil seller to Indonesia.<\/p>",
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