Indonesia joins Asian buyers of Iran oil
Indonesia says it has discussed crude supplies from Iran to meet its rising demand for oil as the Southeast Asian country is expanding its refineries.
Indonesian Energy Minister Sudirman Said met Iran’s Minister of Petroleum Bijan Zangeneh in Tehran last week and agreed to cooperate in the upstream sector.
“We agreed on two things — Indonesia to buy Iranian crude and Iran allow Indonesia to participate in upstream business there,” Indonesia’s Energy and Mines Ministry spokesman Dadan Kusdiana said on Thursday.
The crude volume that Indonesia is looking to import from Iran has not been decided yet, Platt quoted him as saying.
Indonesia is also considering cooperation with Iran in engineering and technical services, especially for refineries and storage facilities, Kusdiana said.
The official stated that the country faced no hurdle for crude imports from Iran.
“The existing sanctions have some exceptions and some countries have been importing crude from Iran despite the sanctions,” he said.
Iran’s major oil clients in Asia are currently China, Japan, South Korea and India which import close to 1 million barrels per day.
The money from the exports is deposited in Iranian accounts in those countries and Tehran has to use a labyrinth of routes to repatriate it due to US-led sanctions.
Kusdiana said an Iranian delegation will visit Indonesia next month to discuss payment issues. The Energy Ministry, he said, has already initiated talks with Indonesia’s central bank, Bank Indonesia.
Indonesia and Iran will also discuss crude specifications when the delegation visits, he said.
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.
An aerial view from an oil refinery in the Indonesian city of Balikpapan on the Borneo island.
Total refining capacity will rise to 1.68 million barrels per day by 2022 when all the four refineries come on stream.
Indonesia currently produces about 800,000 bpd of crude oil, meaning it will need around 2 million bpd of crude oil imports when the refinery expansion plan is complete.
The country is also the region’s largest importer of gasoil and gasoline.
Indonesian Coordinating Minister for Economics Sofyan Djalil also visited Tehran last week and Iranian Energy Minister Hamid Chitchian said the two countries reached a final agreement on building 48 power plants in the Southeast Asian country.