Pertamina to import 1.8m barrels of gas oil in July

Pertamina to import 1.8m barrels of gas oil in July

SINGAPORE (Reuters): Indonesia is looking to buy 1.8 million barrels of gas oil in July, the same volume as in June, a state- owned oil company Pertamina official said yesterday.

Pertamina is still looking at issuing a tender for its July oil imports, but there will be no purchase tenders for fuel oil and jet/kerosene, said the official, who asked not to be identified.

Indonesia, a key buyer in the Asian gas oil market, imported some seven million barrels of gas oil in April and May, but its imports hit the snag of surmounting credit problems recently.

Traders had been expecting Pertamina to issue a tender since, under the new government of President B.J. Habibie, the company moved to end exclusive import contracts with Soeharto family- linked companies Perta Oil and Permindo.

"The tender's maybe not on time, there's some problems," the Pertamina official said.

"Since the lifting will be made in July, there's still some time. We have not decided yet," he said.

The official declined to reveal details of the problems but industry sources said Pertamina was facing difficulties with letter of credits (LCs).

"I don't see any point issuing the tender until they sort out payment basis. Everyone is going to ask LCs from a first class bank," said one trader with a European trading house.

"They are asking oil companies to replace banks as lenders. No one will do that."

Pertamina has also turned down products-for-crude barter deals proposed by several companies which lift crude oil from Indonesia, sources said.

A source at Mitsubishi Corp said last week that the company was trying to do a direct deal instead but had not yet been able to obtain a letter of credit from an acceptable bank and a deal could not be finalized.