Indonesia and Thailand eye 50,000 bpd crude refining deal

Indonesia and Thailand eye 50,000 bpd crude refining deal

KUALA LUMPUR (Reuters): Indonesia's state oil company Pertamina said on Monday it was eying a deal to refine 50,000 barrels-per-day (bpd) of crude in Thailand under short-term contracts.

The deal is much smaller than Thailand's initial offer to refine up to 200,000 bpd for Indonesia, with the output used to meet Jakarta's oil product needs.

"In short term, we are talking about 50,000 bpd... three months first," Pertamina's President Baihaki Hakim said on the fringes of Kuala Lumpur's Asia Oil and Gas conference.

"We are still negotiating the type of crude and pricing," he added.

The idea -- raised by both countries' leaders last month -- would however be for refining Middle East imported crudes, not Indonesian grades, Hakim said.

Indonesia produces about 1.3 million bpd of crudes but has capacity to refine only about a million bpd, less than domestic needs.

Hakim said that Pertamina was also still in talks with Shell to resurrect a similar refinery processing deal in Singapore, which lasted from October to March this year, for up to 90,000 bpd.

"It's difficult to beat Singapore because of transportation cost. We'd like to get the best deal in terms of pricing," he said.

Hakim said Pertamina aims to conclude refining deals, either with Thailand or Singapore or both, by August.

Until then, Pertamina would meet its domestic demand by imports.

Hakim said he was not hopeful about another idea, to refine in Malaysia at Petronas's Malacca II refinery.

This was because one of the refinery's partners, U.S. Conoco, was opposed to the processing deal, he said.