Sonangol Eyes Crude Liftings for Indonesia

Angola's Sonangol is hoping to start supplying crude oil to Indonesia's state oil firm early next year in a possible joint venture, company officials said on Monday.

Indonesia has struggled to attract sufficient investment to halt declining domestic output, which has dropped to about half of its 1995 peak of 1.6 million barrels per day. The former OPEC member has relied increasingly on foreign imports and purchases of overseas oil and gas assets.

Sonangol and Pertamina executives are meeting this week to discuss closer cooperation, which could start with the shipment of one crude oil cargo to Indonesia a month.

"We are considering a joint venture company with Sonangol related to three groups of businesses -- upstream, refining and trade and marketing," Pertamina CEO Muhammad Husen told reporters. "We expect to start importing crude early next year."

If a deal is reached, Sonangol could begin shipments within two or three months, said Francisco de Lemos Jose Maria, chairman of Sonangol's board of directors.

The two sides are also discussing the possibility of building a refinery in Indonesia.

Pertamina believes a refinery with the capacity of between 200,000 to 300,000 barrels per day would be economically viable in Southeast Asia's biggest economy.

"We hope for a groundbreaking as soon as possible. We will discuss it over the next couple of months," Husen said.

Pertamina expects to produce about 554,710 barrels of oil equivalent per day this year, of which 63,500 will be from overseas.

 

Reporting by Wilda Asmarini