(Oil Price)– U.S. supermajors ExxonMobil and Chevron, Indonesia’s state energy firm Pertamina, and other companies from the two countries are expected to sign later on Monday a memorandum of understanding for commodity purchases by Indonesia for a massive $34 billion, an Indonesian official told Reuters.
Apart from energy deals and investments, the memorandum will include Indonesian pledges to buy U.S. soybeans, corn, and cotton, Pujo Setio, a senior official at Indonesia’s Ministry for Economic Affairs, told Reuters.
ExxonMobil, which has more than 125 years of presence in the Indonesia archipelago, has recently ramped up oil production from its operated Cepu oil block, adding 30,000 barrels per day (bpd) to national output. This brings total lifting from Cepu to 180,000 bpd, which accounts for 25% of Indonesia’s current oil production.
The new $34-billion deal set to be signed on Monday comes days ahead of the July 9 deadline the U.S. Administration has given to countries to negotiate trade deals and avoid steep tariffs on their products imported into America.
In early April, Indonesia was slapped with one of the highest tariffs – 32% – in the “liberation day” tariffs announced by U.S. President Donald Trump.
These tariffs were suspended until July 9, during which the Trump Administration expects most countries to come pleading their cases and promising to boost their imports of U.S. goods to reduce their trade surplus with the U.S. and avoid high tariffs.
Indonesia, Southeast Asia’s biggest economy, has signaled it would offer to buy an additional $10 billion worth of American oil and liquefied petroleum gas (LPG).
Indonesia also plans to slash its fuel imports from Singapore and source more refined products from the United States as the country looks to negotiate lower tariffs with the U.S.
Also in May, Argus reported that Pertamina is considering importing oil products from the United States.
By Charles Kennedy for Oilprice.com
