JAKARTA (TheInsiderStories) - State owned energy firm PT Pertamina says it plans to invest in four operating oil and gas blocks in Iran. The deal, if goes ahead, would be Indonesia’s first investment in Iran’s upstream oil sector.
President Director of Pertamina Dwi Sutjipto, the deal is expected to be signed after Eid Al-Fitr. He expects the supply of crude oil from Iran will be delivered to the private refinery in Situbondo, East Java. Pertamina would be the off-taker of private refinery products.
“We are interest in 4 blocks, two onshore and 2 offshore. All the blocks are already operating,” he said.
The signing of the contract was witnessed by Energy and Mineral Resources Minister Sudirman Said and Oil Minister of Iran Bejan N. Zanganeh during his visit in Iran. Indonesia needs 6 million tonnes of LPG per annum, half of which are imported.
The signing of the Liquefied Petroleum Gas (LPG) contract with Tehran is a turning point and the first step towards enhancing cooperation between Iran and Indonesia, Minister Sudirman stated.
Beside LPG’s contract, Pertamina-NIOC also agreed to conduct further discussions regarding the purchase of crude oil and access to upstream investment in Iran. Indonesia imports half of its cured oil needs and it is ready to buy 150,000-200,000 barrels of oil per day of crude oil from Iran.
According to Sudirman, there are seven oil and gas cooperation was agreed such as upstream oil and gas cooperation in Iran, trading oil products, gas projects, oil processing, petrochemical, oil and gas support industry, to increase the capacity of human resources in the field of oil and gas.
He said currently there are some investors who are interested to invest worth $12.2 billion from the Middle East, mostly from oil and gas investments. Sudirman added that there are six investment plans from the Middle East to be realized. The first cooperation project funding is the public private partnership (PPP) with Qatar $1 billion.
Both investment power plant with a capacity of 2×250 of MQ in North Sumatra with Qatar. Currently, the investment process in the stage of formation of a joint venture between Qatar company with a local company, as well as the preparation of funding. The project value is $350 million.
The third is the development master-plan fefinery program (RDMP) Cilacap refinery with the investment value of approximately $5.5 billion. This cooperation is already in the process of signing the contract since May 23, 2016, and start entering the design stage.
Sudirman said the process will continue with the joint venture agreement targeted finished in December 2016. (*)