Pertamina to Rent Oil Refinery in India

KATADATA - The state-owned oil and gas giant Pertamina is planning to rent offshore oil refineries to help achieve the firm’s goal to buy oil in bulk while global oil prices are low. 

Pertamina’s President Director Dwi Soetjipto said they need to rent offshore refineries because most of the oil imported from other countries is not compatible for processing in refineries in Indonesia.

He mentioned that one of the strongest candidates at the moment is India because the country is in a geographically strategic location to refine crude oil that Pertamina buys from the Middle East and Africa. (Read: Govt Ready to do Business with Iran as Sanctions have been Lifted) 

Although Pertamina has still not decided which refineries they will rent, nor the capacity or specifications that the company requires, Dwi stated that this plan will go ahead this year. 

Pertamina could also rent other refineries in other countries because Indonesia buys crude oil not only from the Middle East and Africa but also from other countries, like Azerbaijan and Russia. (Read: Pertamina Urged to Acquire Stakes in Oil and Gas Blocks in Azerbaijan) 

To keep costs down, Pertamina needs to choose refineries in countries close to where they buy the oil. (Read:  Government to Store Oil Abroad)

In the near future, Pertamina is also set to seal a deal for the purchase crude oil with Iran. Dwi said that Indonesia has been buying refined oil from Iran, but he believes that it would be financially viable for Pertamina to buy crude oil and refined it in third-party refineries. “It will be more profitable,” Dwi added.