Pertamina to reach deal with Caltex over CPD by year-end<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina said on
\nTuesday it expected to conclude the negotiation of a crude-
\nprocessing deal (CPD) with Singapore-based Caltex Corp., by the
\nend of this year as part of the effort to guarantee domestic fuel
\nsupplies.<\/p>\n
Pertamina downstream director Muksin Bahar said that both
\ncompanies were now still negotiating prices under the so-called
\n\"deemed CPD\".<\/p>\n
\"We hope Caltex can lower its prices,\" he told a press
\nconference, adding that Pertamina was negotiating a deemed CPD of
\nabout 1.8 million barrels per month or 60,000 barrels per day
\n(bpd).<\/p>\n
He said that Pertamina had a benchmark for the CPD prices
\nbased on Pertamina's processing \"fee\" charged by its own
\nrefineries of between $1.7 and $1.8 per barrel.<\/p>\n
Indonesia has often had trouble in meeting domestic fuel
\nsupplies because its refining capacity is only about the same
\nsize as domestic demand.<\/p>\n
Some 75 percent of the demand is usually fulfilled locally
\nwhile the remaining 25 percent is covered by imports based upon
\nlong-term contracts, oil spot market procurement, and CPDs.<\/p>\n
Pertamina refinery capacity is about 1 million barrels per
\nday, producing about 750,000 barrels of fuel per day.<\/p>\n
Last year, local fuel demand reached 54.7 million kiloliters
\n(344 million barrels), of which 36.8 million kiloliters were
\nprovided by the country's refineries, 13 million kiloliters by
\nthe spot market, 0.6 million kiloliters based upon long-term
\ncontracts, and 4.3 million kiloliters through CPDs.<\/p>\n
The CPD, which has so far been with the Shell Group refinery
\nin Singapore, ended in March without renewal.<\/p>\n
Muksin said that the deemed CPD would be different from the
\nprevious CPD from Shell because the deemed CPD would not require
\ncrude oil from the country.<\/p>\n
\"The administration will be simpler,\" he said, adding that
\ndeemed CPDs would be the trend for CPDs in the future.<\/p>\n
For this year, Muksin said, about 4 percent to 5 percent of
\nthe expected 52.7 million kiloliters of domestic fuel demand
\nwould be covered through CPD.<\/p>\n
According to him, the deemed CPD plan would help control fuel
\nprices on the spot market because Pertamina would not have to
\npurchase fuel from the market in huge quantities should shortages
\nemerge at home.<\/p>\n
\"Basically, we don't want to buy a lot of fuel on the spot
\nmarket because it can drive fuel prices higher,\" he said.<\/p>\n
According to him, it was safer to buy fuel through CPDs
\nbecause the prices would be stable for three to six months.<\/p>\n
Caltex was established by U.S. oil companies Chevron Corp. and
\nTexaco Inc. to handle downstream activities such as refining.<\/p>\n
It owns one third of the 285,000 barrels per day capacity of
\nthe Singapore Refining Co. facility.(iwa)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pertamina-to-reach-deal-with-caltex-over-cpd-by-year-end-1447893297",
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