Indonesia's Pertamina Looks to Cut Refining Costs more than 10% by 2019
JAKARTA, Dec 15 (Reuters) – Indonesia's state oil and gas company Pertamina is set to reduce its fuel processing costs by more than 10 percent over the next four years from 2014 levels by upgrading its refining capabilities, company officials said on Tuesday.
Pertamina plans to upgrade four of its existing seven refineries, and develop at least two new oil processing plants by 2023, more than doubling its domestic capacity to 2.3 million barrels per day (bpd) from 1 million bpd currently.
The company, which supplies a little over half of Indonesia's fuel needs from its domestic refineries, has already reduced its fuel production costs to 102 percent of the benchmark refined fuel product prices for Asia set by oil pricing agency Platts, Pertamina Refineries Director Rachmad Hardadi told reporters, down from around 109 percent in 2014.
Over the next four years, costs could be further cut to 97 percent of the Platts fuel product prices, he added.
The upgrades and the new units will allow the Indonesian state oil company to process a broader range of crude grades, Pertamina CEO Dwi Soetjipto said.
"We will increase the complexity (of our refineries) and buy crude more cheaply," Soetjipto said.
"Now we buy mostly light crude. Later there will be a lot of sour crude," he said, referring to the lower quality oil that has a higher sulphur content but that can still be processed in refineries that have the right secondary units.
(Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing by Tom Hogue)
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