Indonesia's Pertamina opens Singapore office as Petral probe continues

* Prior Singapore office closed in 2015 amid corruption
probes
* Seeks partners in oil blending to make LSFO for ships
* Aims for 5% share in Singapore's bunker fuel sales in 5
yrs
* Plans to enter retail fuel sectors in other SE Asia
nations
* Eyes LPG sales to Chinese petchem plants

By Fathin Ungku and Florence Tan
SINGAPORE, Sept 25 (Reuters) - Indonesia's state-owned oil
and gas company PT Pertamina PERTM.UL has opened a trading and
marketing office in Singapore, returning to the city-state four
years after closing its previous office over a corruption
scandal.
Pertamina's return is part of a broader effort by the
company to boost overseas revenue by expanding in Asia, Agus
Witjaksono, the managing director of the new office, named
Pertamina International Marketing and Distribution Pte Ltd, told
Reuters. The new office was incorporated on Aug. 5, business
records show.
The previous Singapore office, Pertamina Energy Services Pte
Ltd (PES), was shut down in 2015 after Indonesian President Joko
Widodo ordered that its parent company, Petral, be disbanded as
part of efforts to clean up the country's oil and gas sector.
Petral was the trading arm of Pertamina, which an
anti-corruption investigation showed paid inflated prices for
fuel and crude imports.
The former managing director of PES was charged on Sept. 10
by Indonesia's Corruption Eradication Commission (KPK) for
accepting bribes from a Singapore-based company to secure oil
trading deals. Witjaksono was emphatic that the new unit will have
completely different functions from its predecessor.
"Petral dealt with procurement, they buy crude and products
cargo for domestic demand, but we will focus on selling
third-party sourced products as well as Pertamina's products on
a commercial basis," he said.
The new Singapore unit plans to sell bunker fuel, enter
retail fuel markets in the Philippines, Thailand and Myanmar,
and trade liquefied petroleum gas (LPG) in the region,
Witjaksono said.
"We want to take Pertamina to the top 100 on Fortune 500,"
Witjaksono said.
The company is currently ranked 175 on the Fortune Global
500 list.
To achieve that, Pertamina will have to increase its revenue
by $10 billion by expanding overseas, he said.
The state-owned company hopes to leverage its low-sulphur
fuel production to capture a slice of the ship refueling market
in Singapore, the world's top bunkering hub, Witjaksono said.
Ships globally will have to burn fuel that contains 0.5%
sulphur, down from the current 3.5%, to comply with new
regulations from the International Maritime Organization (IMO)
from 2020.
"We have an advantage because of IMO 2020. Pertamina has
low-sulphur fuel oil and blending components so we can enter
into partnerships with oil blenders," Witjaksono said.
Pertamina's refineries produce low-sulphur waxy residue,
decant oil and vacuum residue which can be blended to produce
0.5% sulphur fuel oil, he added.
Oil blending could take place at Pertamina's Sambu oil
terminal, located about 23 km (14 miles) from Singapore, which
is being upgraded in a joint venture with U.S. firm Freepoint
Commodities. Pertamina will supply blending components to Freepoint,
Witjaksono said, adding that the Indonesian firm is also keen to
supply bunker fuel from the terminal to ships.
"There's a change in our strategy as we no longer want to
just sell blending components," he said.
Pertamina also hopes to leverage on its status as the
largest LPG buyer in the region, to get cheaper prices for bulk
supplies and resell smaller parcels to importers such as China
where LPG demand for petrochemical production is growing.
The Singapore office now employs five people and plans to
expand to 16, he said.