Pertamina mulls change in oil import policy

Pertamina mulls change in oil import policy

SINGAPORE (Reuters): Indonesian state oil firm Pertamina is considering a change to the way it imports oil products by securing some barrels via an affiliated company, traders said on Thursday.

Traders said the shift would probably mean that Perta Oil -- an affiliated company of Pertamina -- would supply part of Pertamina's oil products needs on a regular monthly basis.

Pertamina currently awards spot imports through monthly tenders.

"We think Pertamina will allocate a portion of its requirements to Perta and tender on the spot market for the remainder," said a Singapore trader.

The mechanism of the new process was still unclear and officials at Perta and at Pertamina were not available for comment.

Pertamina's recent spot imports via tender each month have amounted to 1.2-1.8 million barrels of gas oil, about one million barrels of gasoline and 200,000-400,000 barrels of fuel oil.

Traders said the new import process would not change import volumes, but it might attract more suppliers to Indonesia. Some companies, which had previously shied away from direct dealings with Pertamina, may consider selling through Perta, traders said.

"When sellers deal with Perta it will be on a private negotiation basis, rather than offering into a (Pertamina) tender. Some traders may prefer this," said a trader.

Traders said that by using Perta, Pertamina would be partly reverting to import practices abandoned two years ago of buying through affiliates.

Before 1998, Pertamina secured spot oil imports almost entirely through Perta Oil and a second affiliate, Permindo Trading.

The affiliates were partly owned by Pertamina and by consortiums linked to former Indonesian president Soeharto.

Buying practices were changed after Soeharto's departure from office in an effort to boost efficiency and transparency.

Traders said that since the change in 1998, Perta, which became a wholly-owned affiliate in late 1998, has sold barrels to Pertamina on a sporadic spot basis, while Permindo had shut down.