12 February 2009

Shell may move refinery to Indonesia

Indonesian Vice-President Jusuf Kalla says Shell is considering moving its oil processing operations from Singapore to Indonesia.

Shell wished to take part in the tender for an oil field in the Natuna Sea. The head of the Capital Investment Coordinating Board, Mr M. Lutfi, said that Shell's chances would be better if it was willing to move its oil refining operations in Singapore to Indonesia.

Shell has a huge presence in Singapore. It has been in Singapore since 1961 when it set up the first oil refinery on Bukom.
Pulau Bukom off Pulau Semakau's seagrass meadows
View of Pulau Bukom from the seagrasses on Pulau Semakau. Pulau Bukom is also near Pulau Hantu and Cyrene Reefs.

Shell may move refinery to Indonesia: V-P Jusuf
Straits Times 12 Feb 09;
ROYAL Dutch Shell is considering moving its oil processing operations to Indonesia from Singapore, said Indonesian Vice-President Jusuf Kalla.

'In a meeting over dinner, Shell has expressed its readiness for it,' he said after visiting the port in Rotterdam, according to a recent Antara report.

He said this after meeting Dutch Prime Minister Jan Peter Balkenender, who told him Shell wished to take part in the tender for an oil field in the Natuna Sea.

The Indonesian news agency said no decision had been made on it but Mr Jusuf said four companies - Exxon from the United States, Shell from the Netherlands and other companies from Europe and China - are on the list to compete for the project.

According to Antara, Mr Jusuf said the Indonesian government had asked the company to run the upstream business as well as oil refinement in the country given that it is already operating downstream business through its gas stations.

The head of the Capital Investment Coordinating Board, Mr M. Lutfi, said that Shell's chances would be better if it was willing to move its oil refining operations in Singapore to Indonesia.

He suggested the Batam and Bintan free trade zones, which were only 20km from Singapore, as possible locations for the operations, Antara reported.

'If Shell would accept the offer, I believe it would have a better position and added value than the others,' he said.

When asked if Shell has any plans to relocate its refinery business, a spokesman in Singapore said: 'Officially, we do not comment on speculation.

'Indonesia is a very important country. Shell has a growing downstream business in Indonesia and continues to look for opportunities to expand our business activities, including in the upstream and in partnership with Pertamina.'

Shell has a huge presence in Singapore. It has been in Singapore since 1961 when it set up the first oil refinery on Bukom.

Shell Singapore also undertakes international trading of oil and petrochemical products and is a key hub of Shell Trading's global trading network.

Veep: Shell ready to move to Indonesia
Antara 9 Feb 09;
The Hague (ANTARA News) - Vice President Jusuf Kalla said here on Sunday that Shell Royal Dutch oil company had expressed its readiness to move its oil processing operations to Indonesia.

"In a meeting over dinner Shell has expressed its readiness for it," he said after visiting the port in Rotterdam.

Dutch prime minister Jan Peter Balkenender in a meeting with Kalla earlier said that Shell wished to take part in the tender for the exploitation of the Natuna D Alpha Block.

Kalla welcomed the interest but no decision had yet been made on it.

Kalla said four companies namely Exxon from the US, Shell from the Netherlands and other companies from Europe and China had been on the list to compete for the project.

He admitted that Shell had the expertise but no decision had been made yet about it. So far, he said, Shell had already operated in oil downstream business in the country through its gas stations. In view of that he said the Indonesian government had asked the company to also take part in the upstream business as well as in oil refinement.

"However the most important thing for us is PT Pertamina," he said adding that the country`s state-owned oil company had to play the biggest role in the business.

The head of the Capital Investment Coordinating Board (BKPM), M Lutfi, meanwhile said that Shell`s chance would be bigger if it was willing to move its oil refining operations in Singapore to Indonesia.

He said he had suggested Batam and Bintan free trade zones which were only 20 kilometer away from Singapore for possible locations for the operations.

"If Shell would accept the offer I believe it would have a better position and added value than the other," he said.

Lutfi said if Shell would move its refining operations to Indonesia it could open up 930,000 new employment for the people in the country and mobilize its 42 company descendants.

He said the Indonesian government was currently opening an opportunity for world companies to participate in the exploitation of the Natuna D Alpha Block.

Although the government has given the right to exploit the block to PT Pertamina other companies could join as Pertamina`s partners.(*)

RI offers Shell to build refinery in Batam
Aditya Suharmoko, The Jakarta Post 9 Feb 09;
Indonesia has opened the possibility for Netherlands-based Royal Dutch Shell Plc., Europe's second largest oil company, to build a refinery in Batam, while shortlisting the company to the explore Natuna block with state oil and gas firm PT Pertamina.

Pertamina has been handed the lead in the massive Natuna project and is now seeking partners.

On Saturday, Investment Coordinating Board (BKPM) chairman M. Lutfi said that while putting Shell on the government's shortlist to explore Natuna, Indonesia had also offered the company to build a plant in Batam for refining and cracking. Lutfi was speaking to reporters after accompanying Vice President Jusuf Kalla in a meeting with Netherlands Prime Minister Jan Peter Balkenende in The Hague.

"We offered the prime minister the possibility to move Shell's facilities from Singapore to Batam. It can do refining and cracking in Batam due to the large amounts of gas there *in the Natuna block*," he said.

He added that if Shell refined 320,000 barrel of oil equivalent per day, it would create 42 new sectors and absorb 192,000 new workers.

"It turns raw materials into half-processed goods," he said.

Total investment for the Natuna block is estimated at US$39 billion, according to the BKPM. Lutfi said that besides Shell, US-based ExxonMobil, Norway's StatOil and China's CNOOC had expressed interest in exploring the site.

The government has ended its contract with ExxonMobil - the previous operator - to explore the block, giving Pertamina the lead in the project. Kalla said the government wanted its natural resource to be explored by several parties "to be more competitive".

"We don't want our all natural resources in one basket. It should be a combination, not only American, but also European, so there will be a comparison to be more competitive," he said.

"Shell has technical experience. I said *to the prime minister* that as long as it complies with the requirements, we're very welcoming."

He added that Pertamina, not foreign companies, should play the biggest role in exploring oil and gas in Indonesia, unlike in previous deals.

"Why was Karen *Agustiawan* chosen as Pertamina president director? Because she's an expert i n refining, processing and distribution," he said. Kalla was referring the new Pertamina chief, who last week replaced Ari H. Soemarno to become the first woman to head the oil company. Karen previously served as Pertamina upstream director.


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