You are here

Pertamina to take charge of Indonesian oil imports from January

121wer5.jpg
Indonesian state-owned energy firm Pertamina will take over the purchase of crude and oil products from its trading arm Petral this month following recommendations from a government panel, two sources with direct knowledge of the matter said on Monday.

[SINGAPORE] Indonesian state-owned energy firm Pertamina will take over the purchase of crude and oil products from its trading arm Petral this month following recommendations from a government panel, two sources with direct knowledge of the matter said on Monday.

Indonesia's new oil and gas governance team recommended last week that Petral should undergo a management shake-up and a forensic audit and be stripped of its right to handle oil imports.

Petral has been one of the targets of President Joko Widodo's anti-corruption campaign aimed at restoring investor confidence.

Petral Singapore will no longer be the sole supplier to the state firm although it will continue to exist as a trading unit, competing with other companies in Pertamina's tenders, one of the sources said.

Pertamina will also open up its tender process to include refiners and trading firms, reversing a government decision a few years ago to limit suppliers to national oil companies (NOCs), he said.

That had reduced options for Indonesia, potentially making its oil more expensive as traders had to pay NOCs a middleman fee to sell oil to Indonesia, industry sources said.

With ample crude in the market, Pertamina could see some cargoes in distress being offered in the tenders once it opens up to more supply sources, a trader with a North Asian firm said. "That should be the way as it will encourage more competition," he added.

REUTERS