Indonesia wants Shell refinery for share in Natuna-D Alpha

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 10 -- Royal Dutch Shell PLC could improve its chances of participating in the Natuna D-Alpha Block by transferring its refining operations to Indonesia from Singapore, according to a state official.

After meeting with Dutch Prime Minister Jan Peter Balkenende, Muhammad Lutfi, chairman of Indonesia's investment coordinating board, said, "We offered the prime minister the possibility to move Shell's facilities from Singapore to Batam."

Lutfi, accompanying Indonesian Vice-President Jusuf Kalla on a state visit to the Netherlands underscored the quid pro quo.

"If Shell were to accept our proposal that they move their fuel refinery operation from Singapore to Indonesia, I guarantee Shell would have greater bargaining power vis-a-vis other [companies]," said Lutfi, who added that ExxonMobil, StatoilHydro, and China National Offshore Oil Co. also are interested in the Natuna D-Alpha block.

Earlier during the visit, Kalla said Shell already had expressed its readiness to relocate its oil refineries to Indonesia. That apparently was supported by a report in Biznis Indonesia, which quoted Shell officials as being upbeat at the prospect. "We are ready to enter the refinery business," said Shell CEO Jeroen van der Veer.

Shell built Singapore's first oil refinery in 1961 and announced plans in July 2006 to proceed with the construction of a new world-scale ethylene cracker on Bukom Island and a new world-scale monoethylene glycol plant on Jurong Island.

Relations between Indonesia and the Netherlands have strengthened in recent months, however, with both sides eyeing increased investment in the Southeast Asian nation's oil and gas industry.

Last month there were reports of Shell Indonesia's interest in the country's coalbed methane (CBM) industry and that the firm will work with state-owned PT Pertamina to develop CBM fields in South Sumatra, where it holds seven concessions.

Those reports coincided with a Jan. 20 announcement that Australian CBM specialist Arrow Energy had spun off a 10% stake to Shell in its overseas unit Arrow International, including interests in India, Vietnam, China, and Indonesia.

In January, prior to the sale to Shell, Arrow signed a preliminary agreement with PT Energi Pasir Hitam Indonesia (Ephindo) to farm in to the Sangatta CBM block in East Kalimantan.

Other developments
In other developments, Royal Vopak NV reached an agreement last October with Mitsui & Co. Ltd. to acquire its 95% shareholding in PT Pro-Intercontinental Terminals Indonesia (Prointal).

The remaining 5% of the shares in Prointal are held by PT Intimitra Pratamausaha, an Indonesian engineering and contracting company. The facility at the Merak Port will be named Vopak Terminal Merak. It operates as a chemical import terminal, providing storage and transshipment services.

Merak, one of the country's petrochemical hubs, is part of Bintan province in West Java. The terminal consists of 33 tanks with a total storage capacity of 76,900 cu m. There is existing land available to expand the terminal.

The Vopak-AKR Corporindo joint venture is building the Vopak Jakarta terminal to store oil products at Tanjung Priok Port, Jakarta. The first phase, 250,000 cu m of storage capacity, is scheduled for completion in the second half of this year.

Contact Eric Watkins at

Related Articles

ExxonMobil forecasts 35% higher world energy demand by 2040

12/10/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

Firms' third-quarter earnings climbed amid lower crude oil prices

12/08/2014 A sample of 58 oil and gas producers and refiners based in the US recorded a combined 38% jump in profits for this year's third quarter compared wi...

Chapman to succeed Pryor as ExxonMobil Chemical president

11/24/2014 Neil A. Chapman is expected to assume the roles of president of ExxonMobil Chemical Co. and vice-president of ExxonMobil Corp. following the retire...

Induced seismicity research effort identifies information gaps

11/10/2014 A federally coordinated effort to determine whether oil and gas activities are related to growing reports of induced seismic activity has identifie...

ExxonMobil, Linn to make second asset exchange this year

10/06/2014 ExxonMobil Corp. has agreed to trade interest in 500 net acres from South Belridge field near Bakersfield, Calif., to Linn Energy LLC, Houston, in ...

ExxonMobil 'winds down' Arctic well, obeys sanctions

09/29/2014 ExxonMobil Corp. released a statement that it is complying with all US sanctions on Russia after news reports that the operator had halted operatio...

AAPG ICE: ExxonMobil outlines international approach to unconventional development

09/22/2014 Global energy demand is expected to increase 35% to 2040, translating to 120 billion boe/year, or nearly 350 million boe/d, stated Rocky Becker, vi...

ExxonMobil ‘winding down’ Arctic well, complying with US, EU sanctions on Russia

09/19/2014 ExxonMobil Corp. released a statement that the company is complying with all US sanctions on Russia after news reports that the operator had halted...

ExxonMobil, Linn to make second asset exchange this year

09/19/2014 ExxonMobil Corp. has agreed to trade interest in 500 net acres from South Belridge field near Bakersfield, Calif., to Linn Energy LLC, Houston, in ...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts

On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.



Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected