Pertamina eyes Iranian oil for Cilacap refinery<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina said on
\nWednesday it planned to import Iranian crude oil to supply its
\nCilacap refinery, in a move that could lead to the replacement of
\nSaudi Arabia's more expensive crude.<\/p>\n
Pertamina president Baihaki Hakim said the company might
\nswitch its crude supplier for the Cilacap refinery from Saudi
\nArabia to Iran, because of the latter's cheaper product.<\/p>\n
Arabia's state oil company ARAMCO, he said, supplies Cilacap
\nwith crude under a long term contract of six months.<\/p>\n
\"As of now, we're still in negotiation with ARAMCO and the
\nIranian Oil Company,\" he told reporters at the sidelines of a
\nhearing before the House of Representatives Commission VIII for
\nenvironmental, science and technology affairs.<\/p>\n
The hearing was held to discuss details of the new oil and gas
\nbill with Pertamina and the Ministry of Energy and Mineral
\nResources.<\/p>\n
Baihaki said that a deal with Iran would require Pertamina to
\npurchase at least between four and six cargoes of crude. One
\ncargo consists of some 1.8 million barrels of oil, he explained.<\/p>\n
He said that ARAMCO supplies Cilacap with some 120,000 barrels
\nof oil per day (bpd), which is 3.6 million barrels per month.<\/p>\n
\"So a purchase of 7.2 million barrels of oil (four cargoes)
\nshould be good enough for a couple of months,\" he said.<\/p>\n
According to him, a deal with Iran could be expected by the
\nfourth quarter of this year at the earliest.<\/p>\n
Asked whether Pertamina sought to replace all of ARAMCO's
\ncrude supply to Cilacap, he said \"not just yet, finding oil out
\nthere isn't easy.\"<\/p>\n
\"We'll have to talk this over with ARAMCO, they have been our
\npartners all this time. Yes, some people say their oil is too
\nexpensive, but that's negotiable,\" he went on.<\/p>\n
He added that the cheaper Iranian oil doesn't necessarily mean
\nit meets Cilacap's requirement.<\/p>\n
\"Cilacap's design spec (specification) is for Arabian light
\noil, so we must be careful,\" he warned.<\/p>\n
Baihaki explained that the crude from ARAMCO supplied to
\nCilacap produces the right proportions of fuel products like
\nkerosene, premium gasoline and diesel oil for Indonesia's needs.<\/p>\n
Changing the type of crude oil could cause the proportions of
\nthese to alter, he said.<\/p>\n
\"Indonesia needs premium gasoline, solar and kerosene. That's
\nour priority; if we lack these we must make up for the shortfall
\nthrough imports,\" he said.<\/p>\n
The Cilacap refinery has two distillation units which have a
\ncombined monthly production capacity of 1.7 million barrels of
\npremium gasoline and 1.98 million barrels of automotive diesel
\nfuel.<\/p>\n
Pertamina, Baihaki said, was studying the possibility of
\nIranian crude replacing Arabian light crude at Cilacap.<\/p>\n
The company had also sent a delegation to Iran for further
\ntalks on this matter with its national oil company.<\/p>\n
He said that earlier, the Iranian government had offered
\nIndonesia the opportunity to purchase its oil directly from the
\ncountry.<\/p>\n
The idea to purchase crude from Iran resurfaced after Baihaki
\nwas informed about a local company proposing to arrange a deal
\nwith Iran.<\/p>\n
The company, whom Baihaki identified as Setco Group,
\ncontrolled by businessman Setiawan Djodi, charged a service fee
\nof 10 U.S. cents per barrel on top of the oil's market price.<\/p>\n
He explained that such oil brokerages were normal in dealing
\nwith Middle East oil producers, where a direct approach was
\nsometimes ineffective.<\/p>\n
But Baihaki said he rejected the proposal, as Iran had already
\noffered to sell its oil directly, without an intermediary.<\/p>\n
\"If we can buy the oil directly and more cheaply, why should
\nwe waste our money on third parties?\" he said.<\/p>\n
Nonetheless, he said, the proposal reminded him to ask whether
\nIran's offer was still valid, upon which Iranian officials said
\nthey had not backtracked on their offer.<\/p>\n
Apart from importing fuel to cover shortfalls in supplying the
\nmarket directly, Pertamina also relies on imported crude oil to
\nfeed its refineries.<\/p>\n
Fuel output from Pertamina's refineries averages some 880,000
\nbpd, as against national consumption of 1.08 million bpd. To make
\nup for the shortfall, Pertamina imports fuel at a cost of around
\n$1.75 billion per year.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-eyes-iranian-oil-for-cilacap-refinery-1447893297",
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