Indonesian President says Pertamina must buy oil directly from source

President Susilo Bambang Yudhoyono directed Indonesia’s state-owned oil firm PT Pertamina to buy crude and fuel oil directly from primary sources. “I requested (Pertamina) to increase its exploration and production business, including in other countries. The move is part of an effort to increase our oil production levels,” Yudhoyono said in a speech. “At the same time, Pertamina must increase efficiency in the trading of crude and fuel oil, with emphasis on purchasing directly from primary sources,” he added. Indonesia used to be a member of OPEC and was once the world’s third-largest LNG exporter. But in recent years, the country has seen crude oil exports fall while the supplies from ageing fields could not keep up with the growth in domestic demand.
Pertamina to stop buying from trading companies
Pertamina will continue to use Petral, its trading unit, for the importation of oil for domestic use, said Pertamina President Director Karen Agustiawan. But starting on the third quarter of this year, Petral will no longer buy oil from other trading companies. “Petral is for Indonesia and outside of Indonesia. For Indonesia, the supply is no longer through traders. But for outside of Indonesia, we can [get supply] through the national oil company or traders; there is flexibility. Petral will act as trading company, like BP, Shell,” said Agustiawan. “Meanwhile for domestic, the supply remains from Petral, but it will be from national oil companies, producers and refineries,” she added. (May 31, 2012)