Luhut between Aramco, Gazprom, & Pertamina

In a very rare moment, Luhut, Investment Minister, blamed Pertamina amid tension of oil price in the wake of Russia - Ukraine. Luhut acclaimed he directly received complaint from Minister of Russia, probably Finance Minister of Russia, Anton Germanovich Siluanov (*Luhut did not mention a specific name but indicated very strong Siluanov) and Crown Prince and Prime Minister of Saudi Arabia Mohammed bin Salman. The issue is very worrisome especially about Saudi investment. The moment happened in the Saratoga Investment Summit, hours ago. Sandiaga Uno and Edwin Soeryadjaya also attend this summit. Very “red flag” for investment or easy doing business in Indonesia. 

Luhut thus argued that cooperation with any country could be conducted so long as it brings benefits to the people of Indonesia. This is very complicated amid the Russia - Ukraine war, and, in a lot of ways, Indonesia, not so brave like India, currently enjoys very cheap oil from Russia and doesn't worry about sanctions from the West.

About Russia, for first. Due to the war and Oil Price Cap from December 2022, the Russian government since the war started already giving a proposal across the world about “very cheap price” Russia energy and commodities. Russia’s Putin knows since before starting the war, that Russia will face boycott or sanction. So far, India enjoyed significant, rocketing oil supply from Russia. “Minister from Russia”, Luhut cited, angry because he claimed that Pertamina already received a proposal from Russia (maybe under Gazprom) about very cheap oil but Pertamina never followed up. In my opinion, Pertamina is really worried that it will be facing a sanction by the Western alliance if Pertamina rubber-stamps Russia's supply. 

The rebalancing of the global energy order continues with India flooded with Russian oil.

Russia became the third-largest oil supplier to India in 2022, making up about 15% of total purchases, dragging down OPEC's share to the lowest in more than a decade. Refiners in India, the world's third-biggest oil consumer and importer, have been gorging on Russian oil sold at a discount after some Western companies shunned buying from Moscow following its invasion of Ukraine last February. In 2021, Russia was at the 17th spot supplying about 1% of India's overall imports. Last month India's oil imports from Russia surged to an all-time high of 1.25 million barrels per day (bpd), about a quarter of overall 4.9 million bpd purchase, the data showed.

India's December 2022 oil imports were the highest in seven months as refiners were drawn to Russian oil due to the deeper discounts offered ahead of a Dec. 5 embargo by Europe and a price cap by the European Union and G7 nations to cut Moscow's oil revenue. Members of the Organization of the Petroleum Exporting Countries (OPEC), mainly from the Middle East and Africa, saw their share in India's crude imports shrinking to 64.5% in 2022, from a peak of 87% in 2008, a Reuters analysis of the data since 2006 showed. "India's oil imports from Russia would continue to rise this year as well, mainly because of discounts if there are no further stringent actions by the Western countries targeting Russian oil," said an official at an Indian refiner. Russia remained the top oil supplier to India in December followed by Iraq and Saudi Arabia.

Higher intake of Russian oil reduced India's appetite for African grades, whose share in 2022 imports declined to a 17-year low while that of Latin America plunged to the lowest in 15 years, In April-December, the first nine months of this fiscal year, Russia replaced Saudi Arabia as the second largest oil supplier to India, while Iraq remained on the top spot.

After February 5th, 2023 (next week), when the embargo on seaborne Russian fuel kicks in, the EU seeks to avoid a supply shock via import diversification. Now, the EU receives most of its fuel from Russia (220 million barrels in 2022). The main replacement is expected from the US & India. Despite curbs, Britain importing oil from Russia via India, a loophole of sanction. India offers a back-door for imports of Russian oil into Britain, new figures suggest, blunting Britain’s efforts to restrict funding for the Kremlin.

This complicated sanction may pushes Pertamina to not buying Russian oil. 

Second, about Saudi Arabia. MbS asked Luhut that ARAMCO was already preparing to help Indonesia to build a refinery, but, again, never followed up by Pertamina. According to a website from the Industrial Ministry of Indonesia on February 6th 2013, former Minister Mohammad Suleman Hidayat already finished a negotiation with ARAMCO about the refinery (worth an estimated US$ 8 billion). But until tonight (Jan 27th, 2023), nearly 10 (TEN) years, the plan was still postponed. Between 2013 - 2023, Pertamina leadership already faced a change / successor until 6 times. From Karen Agustiawan, Muhammad Husein, Dwi Soetjipto, Yenni Andayani, Elia Massa Manik, until currently under Nicke Widyawati (since April 19th, 2018). 

Luhut Pandjaitan said that Saudi Arabia did not want to lose Indonesia as its partner. Luhut added that Saudi Crown Prince Mohammed Bin Salman said that Saudi Arabia wanted to make more investments in Indonesia. "He said he didn't want to lose Indonesia as he lost China in the '80s. 'We want big investments in Indonesia'," said Luhut in Banjarmasin, Friday, July 22, quoting the Saudi Prince's statement.

Luhut also said that Saudi Arabia wanted to invest in various sectors being developed by Indonesia, such as the new capital IKN. This is crucial because Softbank (Masayoshi Son) abruptly withdrew his investment plan to IKN Nusantara, the new capital city of Indonesia. If MbS is desperate (again) about refinery investment, is very worried that MbS will also withdraw his interest in IKN New Capital City. Saudi Arabia, via multiple high ranking in Davos WEF week ago, signaled a shift in how it offers financial help to countries, making future aid conditional on promises to revamp their economies. This is why Indonesia must be very careful if MbS is desperate for Indonesia.

Cheap energy isn't coming back this decade. After 2 months of Price Cap, part of sanction to Russia, Oil Cap Costs Russia $170 Million a Day. Putin insisted Russia’s economy beat expectations. Russia has been showered with sanctions and export controls that seek to cut them off from the global economy, using a kind of systematic might to hinder the Kremlin’s war efforts and punish Putin’s allies.

Initial calculations suggested that Russia’s economy had shrunk by 2.5 percent over the entire 2022, the Russian president said — significantly better than the 33 percent contraction in Ukraine’s economy last year. “Our task is to support and consolidate this positive trend,” Putin added. In St Petersburg today to commemorate Russian heroes in the past, Putin assured Russia will win in Ukraine's battlefield, no matter how gargantuan help by NATO to Zelensky.

The scale of economic firepower directed at Russia since Feb. 24 2022 has been unprecedented for a large country, with the country’s banks banned from the Belgium-based SWIFT messaging system used in international transactions and sanctions on its central bank. The sanction may be very worried by Pertamina BoD if Pertamina agrees to buy Russian oil more and more.

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Menteri Koordinator Kemaritiman dan Investasi Luhut Binsar Pandjaitan telah bertemu menteri ekonomi Rusia. Dalam pertemuan tersebut, Luhut mempertanyakan tawaran membeli minya yang diberikan kepada Indonesia.

Luhut mengaku telah pergi ke Rusia untuk memproses pembelian minyak dari negara tersebut.

"Saya tadi datang menteri ekonomi dari Rusia dia bicara banyak. Terus tadi saya tanya 'Eh kau nawar-nawarin gini-ginian', saya bilang saya sudah pergi ke Rusia. Saya sudah pergi ke Rusia mau beli minyak kau, investasi TPP, ini saya sebutin itu semua Bu Nicke," kata Luhut dalam acara Saratoga Investment Summit 2023 di Jakarta, Kamis (26/1/2023).

Acara tersebut juga dihadiri Direktur Utama PT Pertamina (Persero) Nicke Widyawati. Namun, penawaran itu tak ada satupun yang terealisasi. Luhut mengaku berkunjung ke Rusia pada Agustus 2022 lalu.

"Dia bilang, kau nawarin diri mana yang jadi, satu pun dari 5 bulan nggak jadi. Kami pergi Agustus," katanya.

Kembali, Luhut bertanya mengenai penawaran Rusia. Menteri Rusia itu menyampaikan jika pihaknya kesulitan di mana intinya apa yang ditawarkan dibuat supaya tidak terealisasi.

"Saya bilang kamu nawarin apa? Kita ini konkret. Dia bilang, maaf nih Bu Nicke, ini ada Rachmat yang dekat. 'Kami kesulitan di Pertamina, muter kiri, muter kanan, sini mentok sini. Intinya supaya nggak jadi," kata Luhut.

Luhut pun meminta agar Nicke mengecek persoalan ini. Luhut sendiri telah melaporkan persoalan ini ke Presiden Joko Widodo (Jokowi).

"Jadi Bu Nicke tolong dicek, tadi saya lapor presiden," ujarnya.

Luhut juga mengaku baru mendapat komplain. Tak main-main, komplain itu datang dari Putra Mahkota Arab Saudi Mohammed bin Salman (MbS). Hal itu juga disampaikan Luhut dalam acara Saratoga Investment Summit 2023 di Jakarta, Kamis (26/1/2023). Dalam kesempatan itu dia menyampaikan komplain tersebut ke Direktur Utama PT Pertamina (Persero) Nicke Widyawati.

"Ini Ibu Nicke datang ya? Bu Nicke saya baru dikomplain sama MbS," katanya.

Luhut sendiri juga bertanya kepada MbS kenapa belum investasi di Indonesia. Informasinya, Aramco tak masuk ke kilang minyak.

"Saya bilang sama MbS kenapa kalian belum investasi di Indonesia. Karena katanya Aramco nggak masuk di kilang minyak. Saya tanya Bu Nicke, kenapa ini?" jelasnya.

Luhut pun mengatakan telah mengirimkan pesan panjang lebar kepada MbS. Ia juga telah melaporkan persoalan ini kepada Presiden Joko Widodo (Jokowi).

"Saya text MbS panjang lebar. Tadi saya lapor presiden," ujarnya.

November 2021, Jokowi mengaku membentak Dirut Pertamina karena gagal bangun Kilang. Sesuai janji kampanye pada 2014, Jokowi berjanji bahwa kilang bisa dibangun tapi 7 tahun 1 bulan pemerintahan tidak ada satupun kilang sukses dibangun. April 2022, Jokowi didatangi Menteri Energi Saudi, salah satu pembicaraan adalah minat ARAMCO. November 2022, ditengah / disela G20 Summit, Jokowi bertemu Mohammed bin Salman (MbS) di Bali, juga salah satunya membahas ARAMCO. Akhirnya Januari ini, Luhut sendiri yang dikomplain langsung oleh MbS untuk hal yang sama.