RI, Iran agree to boost cooperation in oil and gas sector

Indonesia is strengthening its bilateral cooperation with Iran particularly in the oil and gas sector following the recent removal of sanctions on Iran, one of the world?s biggest oil producers, The Jakarta Post reported on Thursday.

During a bilateral meeting in Bogor, West Java, on Tuesday, the two countries agreed to cooperate in the upstream oil and gas sector, and data and technology exchange.

The paper quoted the Energy and Mineral Resources Ministry?s oil and gas director general IGN Wiratmaja Puja as saying that Iran offered to supply crude oil, condensate and liquefied petroleum gas (LPG) as well as to develop refineries in Indonesia. In addition, the two countries also agreed to develop human resources as well as conduct research and development together.

?All of those will be conducted through business-to-business deals. Pertamina will hold a meeting on Thursday morning with Iranian firms so that the purchase of crude and LPG can be realized soon,? Wiratmaja said following the meeting on Wednesday.

He said Iran?s crude oil would meet the specifications needed for Cilacap and Balongan refineries, whose supplies are now mostly fulfilled by Saudi Arabian?s oil. Saudi Arabia?s Saudi Aramco is currently also in cooperation with Pertamina to upgrade the Cilacap refinery in Central Java.

Meanwhile, Iran is also seeking to take part in the construction of an integrated refinery and petrochemical complex in Indonesia. The refinery capacity will be about 300,000 barrels per day.

?The total investment will reach US$14 billion, including the petro-chemical industry, but only $8 billion without it,? Wiratmaja said.

Wiratmaja said earlier as reported by this portal that the government offered investors from Iran to build an oil fuel storage with a capacity of 45 million barrels in a bid to increase the country?s buffer reserves to 30-day of supply, from the current average of 21-day.

The international sanctions against Tehran were officially lifted in January after the UN nuclear watchdog the International Atomic Energy Agency (IAEA) ? released a statement saying Iran had fulfilled all of the measures required under its deal with six world powers.

The Post said that in the meeting, Iran also offered Indonesia to take advantage of the growing business opportunities in the country State-owned oil and gas company Pertamina, Saka Energy the subsidiary of another state firm Perusahaan Gas Negara, and Jakarta-listed Medco Energi Internasional are among those that were offered the opportunity to develop the upstream oil and gas sector in Iran.

?There are 29 blocks that Iran is offering us. The blocks are conventional,? Wiratmaja said.

Energy and Mineral Resources Minister Sudirman Said, who is also the ?liaison officer? between Indonesia and the Middle East, revealed that a further meeting in Iran would be scheduled in two or three weeks to seek more opportunities both for Indonesian and Iranian firms.

?There are nine or 10 opportunities that can be explored further. Iran has many hydro power plants, which we will study, as well as twin turbine plants,? Sudirman said.

In past years, contacts at both government-to-government and business-to-business levels had been formed between Indonesia and Iran in an attempt to secure a partnership. However, the planned partnership fell through due to the implementation of international sanctions on Iran.

Pertamina and Iranian firms once planned to establish a new refinery in Banten but nothing came of the plan.(*)