Pertamina asked to review oil deal with Singapore

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has asked Pertamina to review its plan to process its light crude oil at Caltex Singapore?s refinery.

Purnomo said that the government was ready to withdraw the plan if the new deal would cause financial loss to the state.

?The government basically agrees with the plan to import fuel products as long as it will not cause a high cost,? he was quoted by Koran Tempo as saying.

Sources earlier said that Pertamina?s plan to sign a crude processing deal with Caltex Singapore Ltd?s refinery will cause a financial loss to the state-owned oil company of about US$1.2 million per month.

The source said Pertamina would a sign contract with Caltex Singapore Ltd to process the state owned oil and gas company?s crude oil of about 1.5 million barrels per month or 50,000 barrels per day. The light oil crude will be imported from Saudi Arabia. At present, the Arabian light crude is processed by Pertamina?s refinery plant in Cilacap, Central Java.

The refinery which will process the light oil crude is jointly owned by Caltex (30 percent) , Singapore Refining Company( 40 percent) and British Petroleum (30 percent). Its processing capacity if about 100,000 barrels per day.

Besides importing processed oil products, Pertamina also imports light crude oil from Saudi Arabia of about 100,000 barrels per day. The crude oil is processed at the Cilacap refinery plant.

The source said that the planned cooperation scheme with Caltex would certainly cause a significant loss to Pertamina. ?Why should Pertamina process it in Singapore, if the Cilacap plant could do the job,? he added.

He said that Pertamina would have pay an additional cost of about 80 U.S. cent for every barrels of the 50,000 barrels of the Arabian light crude to be processed in Singapore. The estimated monthly loss will reach about $1.2 million.(*)