Pertamina hopes to sign MoU with NIOC soon

State-owned oil and gas firm PT Pertamina hopes to be able to quickly sign a MoU with National Iranian Oil Co (NIOC) that would among others allow the company to import crude oil from two sites in Iran.

The Jakarta Post quoted Pertamina Spokesperson Wianda Pusponegoro as saying Wednesday that the MoU is expected to be signed after the Idul Fitri holidays in July.

She said that Pertamina and NIOC were currently holding discussions to explore potential deals. Talks between the companies were preceded by an agreement between the Indonesian and Iranian governments.

?We have to assess the agreement [between Pertamina and NIOC] further before signing it. We have to be thorough in optimizing opportunities because Iran only gives this chance to a few countries,? Wianda added.

Once the companies secure a deal, Pertamina will be able to import crude oil from two undisclosed sites in Iran for processing at its refineries, such as the one in Cilacap in Central Java.

?The oil from Iran will be processed at fuel oil complex in Cilacap,? Pertamina processing director Rachmat Hardadi said as quoted by The Post.

Pertamina upstream director Syamsu Alam said the two sites in Iran could produce hundreds of thousands of barrels per day. ?But they have not produced that much oil yet. The sites are not yet mature,? Alam said.

Meanwhile, the deal will be Indonesia?s first investment in Iran?s upstream oil sector. Separately, last month, Pertamina agreed to purchase 600,000 tons of liquefied petroleum gas (LPG) from NIOC.

Pertamina estimates that LPG consumption in Indonesia will reach 7.5 million tons in 2016, up 13.6 percent on last year. (*)