Indonesia strikes energy deal with OIC member countries
Tuesday, March 8 2016 - 03:07 PM WIB
Minister of Energy and Mineral Resources Sudirman Said said Indonesia was able to strike important energy deals with several member countries of the Organization of Islamic Cooperation (OIC) during on the sidelines of the OIC Summit from Sunday through Monday
During the summit, Indonesia sought to make deals with several OIC member countries, which are also member countries of the Organization of Petroleum Exporting Countries (OPEC), Sudirman explained during the hearing on Tuesday with the House of Representatives? Commission VII which oversees among other energy affairs.
The countries are Azerbaijan, Iran, Kuwait, and Saudi Arabia.
In the deal with Azerbaijan, Indonesia will import crude oil from the Central Asian country without intermediaries. Indonesia will directly buy a total of 1 million barrels of crude oil from the State Oil Company of Azerbaijan Republic (SOCAR). The price is cheaper because it is bought without intermediaries.
?The purchasing of oil from Azerbaijan will be carried out on the government-to-government (G-to-G) scheme.
In the deal with Iran, the country agrees to sell LPG to Indonesia at a discount of US$25 per ton over the prevailing market price.
?The discount is significant,? he said.
Meanwhile, Saudi Arabia is ready to relocate its oil fuel stocks, equal to one month oil fuel need of Indonesia, to Indonesia provided that Indonesia has enough storage capacity to hold them.
According to the ministry?s data, Indonesia?s oil fuel consumption in 2015 reached 71.3 million kilo liters (kl), meaning Indonesia consumed 5.94 million kl or 37.3 million barrels per month. Of the annual consumption, 32.1 million kl or 45.02 percent was imported.
Director General of Oil and Gas IGN Wiratmaja said at present, there are idle storages with a combined capacity of 1.5 million barrels owned by Production Sharing Contract (PSC) holder. The storages are however scattered across the country and are difficult to access.
The government considers storing the Saudi Arabian fuels at domestic refineries. ?We are going to list refineries which can be potentially used to store the fuels,? he said.
Editing by Johannes Simbolon