Indonesia eyes long-term Iran oil deal
Indonesia is in talks with Iran for a long-term oil supply deal to meet its rising demand for crude as the country is expanding its refineries, its Energy and Mineral Resources Minister Sudirman Said has said.
Last month, Said met Minister of Petroleum Bijan Zangeneh in Tehran to discuss crude supplies from Iran.
Indonesia says it plans to use existing exceptions which allow Iran to export around 1 million barrels per day of oil under a preliminary nuclear agreement to import crude.
An Iranian delegation will reportedly visit Indonesia this month to discuss payment mechanisms.
Indonesia is building four refineries, each with capacities ranging between 300,000 bpd and 350,000 bpd, to cut its dependency on oil product imports.
The country also seeks to return to OPEC which was expected to examine the request Friday in a meeting in Vienna.
Zangeneh said he would welcome Indonesia’s return to the Organization of Petroleum Exporting Countries. Jakarta is rejoining OPEC seven years after it quit the group because it barely had any oil to export.
Said told Bloomberg that rejoining OPEC would help strengthen ties between producers and consumers.
A memorandum of understanding for long-term oil supply was signed between Iranian and Indonesian companies in February 2014.
Iran however has halted a plan for building an oil refinery in Indonesia, Deputy Minister of Petroleum Abbas Kazemi said on Tuesday.
Kazemi said Iran looks for long-term customers for its crude oil under a new export strategy. He said Iran can count on steady customers for durable sales through building oil refineries in foreign countries.
“Building refineries abroad with the participation of international investors can guarantee the security of sales and exports of crude oil from Iran for a period of 20 to 25 years,” he told the Mehr news agency.
So far, Iran has signed an MoU with Brazil to construct a refinery in the Latin American country for processing 300,000 barrels per day of crude oil.
Further negotiations have been held with the Chinese and Indians but plans for building oil refineries in Malaysia, Indonesia and Syria have been put on hold, he said.
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