Mobil weighs up move into Indonesian market

Mobil weighs up move into Indonesian market

SINGAPORE (AP): Mobil Corp. is open to buying refineries with a good customer base, especially in the lube oil business, and would consider distribution in Indonesia if "a level playing field" were created by the new government, the U.S. company's chairman, Lucio A. Noto said yesterday.

"If the right kind of refinery capacity became available at the right price I would not close my eyes to it," Noto told reporters after a meeting of the Singapore-U.S. Business Council, which promotes joint ventures in Southeast Asia.

The group travels to China on Wednesday and Thursday.

"There are a lot of opportunities because the slowdown in Asia has triggered a slowdown generally in our business," Noto said, answering a question about the giant company's bargain-hunting activities in the region. "There are assets around the world, so these assets would have to compete with other assets."

Noto, who is also Mobil's chief executive, also said that the international crude oil price is too low and should rise by about US$3 a barrel to $17 in the long term. He said, "$22 is too high and $13 is too low" for crude.

The benchmark July light, sweet crude oil futures contract closed Friday on the New York Mercantile Exchange at $14.78 a barrel, a gain of 15 cents on the day.

Mobil Corp., based in Fairfax, Virginia, will be sending its evacuated employees back to Indonesia as soon as the situation is stable and the threat of violence is past, and senior managers never left, Noto said.

The company would be interested in getting into the oil products distribution business in Indonesia, he said. "We've always told the government if there's a level playing field opportunity, we're interested," Noto said, referring to the monopolies and inside deals that characterize major Indonesian business and industry sectors.

"Indonesia will probably not be an exporter of crude for a long time and therefore we would expect for the government to relook at how it wishes to structure the industry," Noto said.

"It's a populous country, so there's a market. It's a tough market because it's spread out over long distances and therefore distribution is complicated."

"I suspect there will be a different structure for distribution of oil products in the country," Noto said.