Iran has started negotiations to export oil to Indonesia, but the two sides are yet to reach a final agreement, director of international affairs at the National Iranian Gas Company (NIGC) said, IRNA reported Sunday.
Seyyed Mohsen Ghamsari said, "There are technical difficulties on oil exports to Indonesia." According to reports, Indonesia has the capacity to process one million barrels of oil per day, equal to two-third of domestic demand, meaning it needs to import 500,000 barrels per day to cover the shortfall.
He stressed that any agreement on oil exports would be under the framework of sanctions.
The US imposed oil and trade sanctions on Iran to curb the country's nuclear program which it claims is geared to military use.
Iran insists it is peaceful. Iran and P5+1 (a group of world powers including the US, Russia, China, UK and France, plus Germany) were unable to reach a comprehensive deal by a November 24 deadline and extended the talks for seven more months.
Indonesian President Joko Widodo has urged the country's energy and mineral resources ministry to purchase oil directly from major producers, as the Southeast Asian state seems unable to increase crude production capacity in the near future.
Indonesia left OPEC in 2009 because it ceased to be a net exporter. It could not fulfill domestic demand, as growth in demand outstripped output. However, it is still exporting light and sweet crude, and importing heavier brands.
Iran and Indonesia have expanded ties in the past several months. The two countries signed a memorandum of understanding in November to establish a joint venture for the export of petrochemicals.
Additionally, Iranian Oil, Gas and Petrochemical Products Exporters' Associations announced in June that an agreement was signed by Iran, China and Indonesia to build 6 natural gas and gas condensate refineries in Indonesia with an estimated $3 billion investment.
