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Indonesia Books Sharp Drop In Oil Imports

Indonesia recorded a substantial decline in crude oil imports in June, official statistical data quoted by S&P Global Platts showed, as the country boosted domestic production.

At 833,630 metric tons, the June crude oil imports were 48.8 percent lower than the amount imported in May, as local state energy company Pertamina focused its efforts on growing domestic production amid a falling rupiah that made imports costlier, S&P Global Platts notes.

Earlier this month Reuters reported that Pertamina will get access to an additional 225,000 bpd of crude as part of a government plan seeking to reduce its dependence on imports. The plan involves foreign oil field operators in Indonesia selling all their production to the state.

Indonesia, which is the biggest energy consumer in Southeast Asia, and also the biggest oil producer in the region, pumps about 775,000 bpd, of which Pertamina currently receives 550,000 bpd, while the rest is sold abroad. Now, with all local production going to the state company, Pertamina will be able to reduce its crude imports by 60 percent. Related: Oil Markets Are In For A Bumpy Ride

At the same time, the state company is trying—and being encouraged by the government—to expand its local operations by replacing foreign operators as part of a growing resource nationalism drive in the region and elsewhere. In early August, Pertamina took over one of Indonesia’s largest oil blocks, in Sumatra, from Chevron, whose contract expires in 2021.

The state company outbid the supermajor, which had offered US$88 billion in investments through 2041, although the exact size of its “better proposal” as quoted by the Nikkei Asian Review was not revealed. According to a statement from the energy ministry at the time, Pertamina’s takeover of the Rokan field will increase its share in domestic oil production from 23 percent to 60 percent in 2021.

Earlier this year, Pertamina took over a major gas block previously operated by Total and Inpex.

By Irina Slav for Oilprice.com

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