Anticipating Oil Crisis, Pertamina Wants to Process All Domestic Crude Oil

22 Januari 2012 17:31 WIB

JAKARTA, PT Pertamina (Persero) wants to process all domestic crude oil and is preparing to give best offer to all Cooperation Contract Contractors (KKKS) to persuade them to sell their part of crude oil to be refined in Pertamina's refineries.

This offer is part of the anticipation of the possibility of oil crisis if the situation at Hormuz Strait worsens and to maintain Indonesia's energy security. For that, Pertamina request for the Government's support to improve the regulation for oil product to allow the option for Pertamina to purchase the KKKS' crude oil.

Pertamina's effort to buy up KKKS' crude oil has gain full support by the Upstream Oil and Gas Supervisory Agency (BPMIGAS), however currently there is no regulation on this matter and the improvement on the regulation is needed so that KKKS are willing to sell their part of crude oil for domestic refineries.

Beside sending the letter to BPMIGAS, Pertamina has also sent the purchasing request letter of domestic crude oil to all KKKS that are still exporting their part of crude oil, which reach around 210,000 bph. 

"The government's part of domestic-produced crude oil refined by Pertamina has been purchased at Indonesian Crude Price, which value is relatively higher compared to market price. Pertamina pay government's part of crude oil at around Rp600 billion higher than market price yearly," Vice President Corporate Communication Pertamina Mochamad Harun said.
The absorption of domestic crude oil by Pertamina has been proven to be beneficial for the State. Besides providing higher income, the purchase of domestic crude oil can also maintain the price of Indonesia's crude oil at high and competitive level.

Pertamina's refineries currently have been processing all crude oil produced by Pertamina and all crude oil belong to the Government, amounting to 534 barrel per day (bph). Besides, Pertamina has been buying KKKS' part directly, amounting to 3,500 bph, which is considered still far from satisfaction because Pertamina's refineries are capable of processing up to one million bph.

Pertamina also plan to absorb all crude oil produced domestically that belong to KKKS operating in Indonesia. The crude oil belong to KKKS exported so far has reached 210,000 bph.

"Crude oil that we want to purchase but currently is still exported by KKKS are the Sumatera Light Crude amounting to 64,000 barrel per day, Duri 81,000 barrel per day, Arjuna 4,000 barrel per day, Cinta 9,000 ribu barrel per day, Widuri 9,000 barrel per day, Ataka 6,000 barrel per day, Handil 5,000 barrel per day, Belida 4,000 barrel per day, Geragai 3,000 barrel per day, Kaji 8,000 barrel per day and Senipah 30,000 barrel per day," Harun explained.

Pertamina has also prepared the road map for national fuel security improvement by planing upgrading and building of new refineries until 2018. Some projects like refurbishment of Plaju, Kerro Treater Dumai-BLPP, RFCC Cilacap-Langit Biru Cilacap Program, Bottom Upgrading BLPP, revamping Dumai and construction of two new refineries in Balongan, West Java and Tuban, East java, will increase the production of national fuel from 40.6 million KL annually to 66.7 KL annually in 2018.