Pertamina eyes stake in BP unit
Moch. N. Kurniawan, The Jakarta Post, Jakarta
State oil and gas company Pertamina said on Tuesday it was considering buying British American oil firm BP Plc.'s shares in Singapore Refining Co.
Pertamina president Baihaki Hakim said that Pertamina was in talks with BP about the share price.
"We were not interested when BP offered them to us a year ago, but we were approached once again with a more interesting price. Now, we are open to the possibility of buying them," he told the media after speaking at a seminar on the oil and gas industry.
Pertamina had been offered a 30 percent stake in the Singapore oil refinery operation, he said, but had yet to decide whether to buy all or only part of the shares.
Singapore Refining is equally owned by Singapore Petroleum Co., BP and Caltex Corp. It refines about 285,000 barrels per day in its facility on Singapore's Jurong Island.
Baihaki said that the move was also part of a plan to expand its business, adding that Pertamina aimed at becoming a world class oil and gas firm.
Pertamina is being forced to aggressively expand in the hope of gaining more revenue following the enactment of the country's new oil and gas law. Under the new law, Pertamina will no longer monopolize the oil and gas industry as the upstream sector will be liberalized in two years and downstream sector in four years.
The law stipulates that Pertamina must become a limited liability firm in two years.
Elsewhere, Baihaki said that Pertamina had secured a US$250 million foreign loan out of its $1 billion loan plan, which would be used to acquire Spanish-Argentinean firm Repsol-YPF's Indonesian oil and gas operation.
"We're just waiting for the final signing ceremony," he said.
He declined to name the foreign lenders.
He added that Pertamina was also in negotiations with the same group of lenders for another $400 million loan to be used to help finance the development of a gas pipeline connecting Sumatra and West Java.
"I'm optimistic we can get this loan," he said.
Baihaki earlier said that Pertamina had received initial commitment from three Japanese and U.S. financial institutions to provide up to $1 billion in loans to finance the company's expansion.
Elsewhere, Baihaki said that Pertamina had also proposed to the government to change the status of its two liquefied natural gas (LNG) plants into a profit center to help the company generate more revenue.
Pertamina owns a majority stake in the Arun plant in Aceh and the Badak plant in East Kalimantan.
"Overall, the LNG selling mechanism must also be altered," Baihaki added.
"We should be allowed to raise money from the plants as they produce LNG from gas," he said.