Pertamina may cancel plan to process oil in Thailand

State-owned oil and gas company Pertamina may delay its plan to process crude oil in Thailand due to the limited capacity of the refineries in the country, the company's senior executive has said.

Ariffi Nawawi, the director for downstream operations at Pertamina, said in Jakarta on Friday that the Petroleum Authority of Thailand (PTT) would not be able to meet Pertamina's order to process 200,000 barrels of oil per day.

"Pertamina might cancel its cooperation plan with PTT. Besides, we don't need it right now, it is unlikely that PTT is able to meet our demand to process 200,000 bpd," he was quoted as saying by Bisnis Indonesia.

In a hearing with the House of Representatives on Wednesday, Pertamina's president Baihaki Hakim also made a similar statement. "Basically, within the next few months, crude processing deal with Thailand is not yet needed," he said.

Pertamina and PTT signed a memorandum of understanding (MOU) agreement during a visit of President Abdurrahman Wahid to Thailand recently under which the Indonesian state oil and gas company would process its crude oil in PTT's refinery plants to meet the domestic demand.

PTT said it was ready to meet Pertamina's order to process up to 200,000 bpd of crude oil, saying that its two refineries have an excess capacity to meet the order.

PTT said that its Thai Oil refinery plant has an excess capacity of 40,000 bpd and its Bangehak plant about 60,000 bpd.

Senior official of PTT said the petroleum authority would cooperate with a private company to process the remaining 100,000 bpd. But Pertamina still doubted the ability of Thailand to process its crude oil despite PTT's strong commitment. (*)