Pertamina to import crude oil directly from producers

Beginning the third quarter of this year, state owned oil and gas company PT Pertamina will import crude oil directly from producers to improve cost efficiency, Investor Daily reported on Wednesday.

Pertamina?s President Director Karen Agustiawan said in Jakarta on Tuesday that in the future the state oil and gas company would no longer rely on traders in the procurement of crude oil or refined fuel from international markets.

?However, for this, we have to be careful because a failure in the crude oil supply will be fatal as it could cause an energy crisis in the country,? she said, adding that in realizing the plan, Pertamina would cooperate with national oil companies of producing countries or refinery owners.

Karen hoped that the government would support the program because oil purchases conducted directly from producing countries are usually part of G to G cooperation.

At present Pertamina through its trading arm Pertamina Energy Trading Limited (PETRAL) buys crude oil or refined fuel from brokers. This practice, however, has been widely criticized. Some members of the House of Representatives have for example called for the dissolution of the company saying that the operation of the company only benefited several middlemen.

Karen claimed that there is nothing really wrong with the current system in the procurement of crude oil because all the trading practices are based on good corporate governance (GCG). However, she acknowledged that Pertamina should always be ready to make changes in order to further improve the system in the procurement of crude oil and refined fuel for the country. (*)