A crude oil tanker sails through the Persian Gulf towards Kharq Island to transport crude oil to export markets in the Persian Gulf, Iran. (Bloomberg)

June 28, 2018

Indonesia’s government decided last month to freeze Pertamina’s deal to operate the Mansouri oil field in Iran because it wanted to preserve the country’s “good relationship” with the United States, Pertamina’s Acting Chief Executive Nicke Widyawati said on Tuesday.

“We have a good relationship with the United States, and so, it is on hold,” Widyawati told Reuters, adding that the decision came after consultations between Indonesia’s presidency, energy and mines ministry, and Pertamina.

Widyawati made the comments at an event on the sidelines of a global natural gas conference in Washington. She would not say whether the Mansouri project was likely to be revived in the future.

The U.S. State Department on Tuesday said it was pushing allies to cut their crude imports from Iran to zero as part of renewed sanctions it is imposing after President Donald Trump abandoned a deal reached in late 2015 that limited Tehran’s nuclear ambitions.

Indonesia, a former OPEC member, is becoming a growing energy trading partner with the United States, with a 20-year liquefied natural gas supply deal with U.S. exporter Cheniere Energy that begins this year.

Widyawati said some portion of early deliveries from that deal would likely be resold by Pertamina’s trading operation, since Indonesia’s own gas production will likely meet domestic demand until at least 2020.

“Yes, some of it will be resold,” she said.

She said, however, Indonesian gas demand would rise sharply in the coming years due to new petrochemicals facilities and a gas-fired power plant coming on line.

Reuters

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Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.