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 hippalus@yahoo.com.

Related Articles

Second ExxonMobil crude tanker nears service

01/12/2015 The second of two new US-flagged crude oil tankers belonging to SeaRiver Maritime Inc., the marine affiliate of ExxonMobil Corp., has been built an...

ExxonMobil forecasts 35% higher world energy demand by 2040

12/15/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

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...
White Papers

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


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