Pertamina's Appointment May Optimize Benefit Of State's Oil

Jakarta , Sept 11 (Antara) - State-owned oil and gas company PT Pertamina was appointed to sell oil belonging to the state to optimize the utilization of the commodity, stated the Oil and Gas Regulatory Special Task Force (SKK Migas). J. Widjonarko, acting SKK Migas head, said here on Wednesday that Pertamina was finalizing the draft agreement with his office to manage the state`s oil. "The Memorandum of Understanding (MoU) is still being finalized, with emphasis on technical matters and the methods for managing the state`s oil," he asserted. Widjonarko said SKK Migas had given full control of the state`s oil to Pertamina to ensure the optimal use of the commodity. He noted that Pertamina would have the ability to swap the oil for other types of oil used in its refineries . Pertamina can also appoint its subsidiary Pertamina Energy Trading Limited (Petral) to manage this oil, he added. "We will not interfere with Pertamina`s methods," he claimed. He hoped that the change of hands in managing the state`s oil would be completed right away to avoid any disruptions in oil production. Meanwhile, the Commercial Deputy at SKK Migas Widhyawan Prawiraatmadja remarked that the oil belonging to the state was being entrusted to Pertamina because the company owns refineries and plays a key role in supplying subsidized fuels in Indonesia. "Hence, oil found to be unsuitable can be sold for something that better suits Pertamina`s requirements," he pointed out . Earlier, Minister for Energy and Mineral Resources Jero Wacik had stated that SKK Migas will discontinue calls for tenders to sell oil and gas. The minister stated that all of the state`s oil and gas will be handled by Pertamina, confirming that oil swaps with other refineries would be possible. Pertamina can also modify its refineries to receive more oil. Indonesia currently produces some 800 thousand barrels of oil per day, of which, around 85 percent belongs to the state and the remaining 15 percent is owned by contractors. Of the state-owned oil, some 80 percent is sent to Pertamina`s oil refineries, and the remainder is exported. SKK Migas exports oil through third parties that have won a tender. The export option has been utilized frequently to date since the type of oil being produced is not suitable for Pertamina`s refineries.