Pertamina wants to process all of Indonesia crude oil production
Monday, January 23 2012 - 07:32 AM WIB
State oil and gas company PT Pertamina has expressed its intention to process all locally-produced crude oil at its oil refineries and is ready to buy all crude oil production of production sharing contractors (PSC) at competitive price.
The company said in Jakarta on Monday that the intention was aimed at anticipating an oil crisis, such as one which might be potentially triggered by the worsening security situation at Hormuz Strait, and in general to maintain Indonesia's energy security.
For that purpose, Pertamina has asked the government to amend the regulations on PSC so that Pertamina could buy the oil share of PSC contractors. Upstream authority BPMIGAS has supported Pertamina's intention to buy the oil share of PSC, but so far there has been no specific regulation on such sale.
Beside sending a request letter to BPMIGAS asking for its approval for buying the PSC oil share, Pertamina has also sent same similar letter to all PSCs which until now still export their crude oil shares.
"The government's crude oil share, processed by Pertamina, is bought by Pertamina at prices relatively higher than the market prices. Pertamina has been paying the government for its oil share it bought at about Rp 600 billion higher than the market value every year," said Mochamad Harun, Pertamina's Vice President for Corporate Communication.
Currently, Pertamina's refineries have processed all of its crude oil production and the government's oil share, which all amount to 534 thousands barrel per day (bpd).
Other than that, Pertamina has also purchased the oil share of PSC at 3.500 barrels per day. But still, all of the purchase are not enough as Pertamina's refineries have a total capacity of almost 1 million barrels per day.
That is why Pertamina wanted to purchase all the oil production share of all PSC operating in Indonesia. The PSCs total shares amount to about 210 thousand barrels per day.
?We want to absorb all crude oil shares of the PSCs that are still exported until now. Their total shares are about 210 thousand barrels per day," he said.
"The crude oil we want to buy but until now is still exported comprises of 64 thousand BPD of the Sumatera Light Crude, 81 thousand BPD of Duri, 4 thousand BPD of Arjuna, 9 thousand BPD of Cinta, 9 thousand BPD of Widuri, 6 thousand BPD of Ataka, 5 thousand BPD of Handil, 4 thousand BPD of Belida, 3 thousand BPD of Geragai, 8 thousand BPD of Kaji, 30 thousand BPD of Senipah.
Pertamina has also prepared a road map until 2018 on improving Indonesia oil fuel security. It includes the programs to upgrade its existing refineries,and develop new refineries, namely Balongan, West Java; and Tuban, East Java. With the upgrading and the new developments, Pertamina expects to increase the total national production of refined petroleum-based fuel from the current 40,6 million kiloliter per year to 66,7 million kiloliter per year by 2018.
The projects are expected to improve the oil security and press down import. However, to realize the investments we need the support of the government in the form of incentives and conducive regulatory conditions that make such investments more attactive, he said.
Editing by Benget Besalicto Tnb.