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.