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British Petroleum Expands to Indonesian Retail Fuel Market
TEMPO.CO, Jakarta – UK-based oil and gas company British Petroleum (BP) expanded its business in Indonesian retail fuel market. The company has joined hands with local fuel distributor PT Aneka Kimia Raya Corporindo Tbk (AKR), after signing an agreement on April 5, 2017, in London.
Both parties agreed to establish a joint venture in the fuel business. AKR will operate a company named BP AKR Fuels Retail.
“BP’s retail strategy will focus on differentiated, high-quality fuel and lubricating oil,” BP’s Chief Executive Officer-Downstream Operation Tufan Erginbilgic said in a press release on Thursday, April 6, 2017
BP and AKR have worked closely since November last year when they signed an agreement to develop aviation fuel business in Indonesia. Local aviation fuel market is still dominated by state-owned oil and gas company PT Pertamina (Persero).
AKR director Haryanto said that the partnership with BP has presented the company with an opportunity to expand its market. AKR has been primarily trading non-subsidized diesel fuel. “Indonesian gasoline market has the potential to continue to grow, in line with increasing demand and deregulation [initiatives] carried out by the government,” Haryanto said.
AKR has been provided wit a quota of 300,000 kiloliters of diesel fuel distribution this year. Data from the Regulatory Agency for Upstream Oil and Gas (BPH Migas) show that the company distributed the fuel to 142 agents.
The same data revealed that few companies are engaged in the fuel business. Some 11 business entities applied for a tender for diesel fuel distribution last year. Only three companies submitted the bidding document.
The companies were Pertamina, AKR and Tri Wahana Universal.”Up until the deadline, only two business entities submitted their bidding documents, namely Pertamina and AKR Corporindo,” BPH Migas chairman Andy Noorsaman Sommeng said.
BP has already invested in upstream oil and gas industry as a contractor of profit sharing agreements. The company operates Tangguh liquefied natural gas (LNG) refinery unit I and II. BP has also developed refinery unit III in the same location.
Source: https://en.tempo.co/read/news/2017/04/07/056863582/British-Petroleum-Expands-to-Indonesian-Retail-Fuel-Market