Pertamina to sign 50,000 Bbl/day accord with Shell

PT Pertamina, Indonesia's state oil and gas company, will sign a processing agreement with Royal Dutch Shell Group today aimed at preventing shortages in Indonesia's domestic fuel market.

Under the agreement, Shell will process 50,000 barrels of crude oil a day in its Singapore refineries for Pertamina, said Baihaki Hakim, Pertamina's chairman. He declined to provide details on how much the contract is worth.

"This will offer us second-tier protection," against fuel shortages, Hakim said.

Damage at Pertamina's Balongan refinery in West Java, which supplies about 80% of Jakarta's fuel demand, as well as an increase in demand for kerosene, caused petroleum shortages in the country in July and August.

In the past, scarce supplies of important oil products such as gasoline and kerosene, a common cooking fuel, have triggered civil unrest in Indonesia. (*)