RUSSIAN OIL SUPPLIER SHOWS INTEREST INTO INDONESIA

Russian supplier shows interest in supplying crude to RI (Photo: sunnewsonline)

Jakarta, 17 Muharram 1436/10 November 2014 (MINA) – After receiving various offers of crude oil supply, Indonesia is working on another offer from oil rich Russia, according to a top official.

Energy and Mineral Resources Minister Sudirman Said said on Friday he had been contacted by the interested supplier.

“I’m still assessing it. I want to find the right channel because sometimes the information is claimed by many parties. I want to meet the decision maker, not only the subordinates,” Sudirman said, The Jakarta Post quoted by Mi’raj Islamic News Agency (MINA) as reporting.

Less than two weeks after his appointment, Sudirman has talked to several petroleum producers interested in supplying crude oil to Indonesia and assessing further possibilities to invest in refineries.

Angola’s Sonangol EP recently signed a principal agreement with state-owned PT Pertamina over a deal on crude supply as well as planned cooperation in developing the petrochemical business and building refineries.

Earlier this week, Iranian representatives also visited the Energy and Mineral Resources Ministry to refresh their planned investment and supply to the country.

Sudirman said he would continue a similar approach in securing the direct supply of oil to the country from many sources.

“No matter what, we cannot boost oil in a very short time. There will be a gap [between output and demand]. We don’t want to be dependent on one source. The more diverse our sources, the healthier we are,” Sudirman said.

Indonesia, a former member of OPEC, has been struggling to meet the growing demand of oil and its products when its resources have been depleted.

Oil production is below 800,000 barrels of oil per day (bopd) while demand has reached 1.6 million bopd.

Upstream Oil And Gas Regulatory Special Task Force (SKKMigas) acting chief Johannes Widjonarko earlier said the country’s oil output would likely stand at 794,000 bopd by year end, far below a target stipulated in the state budget of 818,000 bopd.

Under the 2015 state budget, oil output is targeted at 900,000 bopd next year. Even if the calculation of growing production from Banyu Urip at Cepu block in Central Java is included, next year’s target is still seen as too high.

Indonesian Resources Studies (IRESS) director Marwan Batubara expected that the government could be transparent with the terms of crude oil contracts established, with suppliers directly supplying the commodity to the country.

“The direct supply encouraged by G to G [government to government] is good because it gives certainty about long-term supply and good prices as long as the two countries’ relationship runs well. However, we need to know the details of the contracts,” Marwan said.

“It doesn’t matter who is behind the investors because the broker is always there. The most important thing is transparency so that we are sure that the contracts won’t disadvantage us,” he added.(T/P009/R03)

Mi’raj Islamic News Agency (MINA)