The Islamic Republic of Iran as one of the most distinguished countries in the region is now in a path that Indonesia experienced in terms of growth in gross domestic product over past few years.
The Iranian and Indonesian officials have always expanded their interactions since Indonesian President Joko Widodo took office concurrent with President Hassan Rouhani’s second year in office.
The visit by President Rouhani to Indonesia in May 2015 and the reciprocal visit by President Widodo to Iran in December 2016 as well as exchange of visits by the two countries’ other officials show their political will to boost their interactions.
As one of the main poles of the Association of the Southeast Asian Nations (ASEAN), Indonesia, experienced a six percent growth in gross domestic product (GDP) between 2008 and 2013 and is considered a newly-emerge economy with vast capacities for cooperating with other countries.
The capacities and advantages of the two countries will pave the way for broadening of cooperation in different sectors, including trade and energy, and this can eventually accelerate the pace of the two countries' developments.
In an indication of fostering mutual cooperation, Indonesia's 46-member economic delegation departed Jakarta for Tehran on Feb 25 to kick off talks with Iranian officials in the field of trade, energy, banking and agriculture. Coordinating Minister for Economic Affairs Darmin Nasution was heading the delegation.
While in Tehran, the Indonesian delegation followed up agreements reached during the visit by President Joko Widodo to Iran last December as well as approvals of the 12th joint economic commission meeting.
Meanwhile, continuation of gas imports by Indonesian State-owned Oil and Natural Gas Corporation Company (PERTAMINA) from Iran as one of the main subjects for discussion.
Considering Indonesia's neighbors like Malaysia and Australia are among gas exporters, so price of liquid natural gas (LNG) is important for Jakarta and its officials discussed and consulted this issue in Tehran visit.
Deepening ties
In meeting with Nasution, President Rouhani said that Tehran welcomes expansion and deepening of ties with Jakarta.
President Rouhani called for prompt implementation of agreements previously signed between Tehran and Jakarta voicing readiness of the Iranian companies to participate in development projects of Indonesian refineries as well as electricity and road construction projects.
The president also welcomed Indonesia's willingness to invest in Iran’s energy sector and increase imports of oil and gas from Iran.
The level of Iran-Indonesia relations, particularly in the field of economic activities, should develop more than before considering capabilities and potentials of the two countries, said the President.
Banking interactions
Nasution underlined Jakarta’s intention to bolster ties with Tehran in all fields, especially the economic affairs.
He added that Indonesia is ready to invest in Iran's oil fields and is willing to participate with the Iranian companies in construction and development projects for oil refineries in Indonesia.
Nasution said that the Central Banks of Iran and its Indonesian counterpart have reached good agreements for banking interactions.
He added that Jakarta also wants to increase its oil and gas imports from Iran.
Oil purchase
Indonesia says it is looking into the prospects of purchasing crude oil from Iran through long-term supply agreements.
Nasution told Mahmoud Vaezi, Iran’s minister of information and communication technology, that Indonesia had purchased one million barrels of oil from Iran for a related compatibility check with its refineries.
He added that once the check is successful, Jakarta would proceed with sealing a long-term supply deal with Tehran in the near future, Press TV wrote.
Nevertheless, Nasution emphasized that a serious plan on the country’s agenda was to invest in two Iranian oil projects – Mansouri and Ab Teymour – which he said had the potential to produce a collective of 200,000 barrels per day.
Nasution said Iran and Indonesia were yet to fully use the available potentials to boost their mutual cooperation.
He said that there are a series of areas that have a high potential of cooperation. They, the Indonesia minister said, included agriculture, oil and gas, tourism and customs affairs.
Vaezi, for his part, said Tehran expected to see an increase of 25 percent in its level of trade with Indonesia in 2017.
He emphasized, the value of trade between the two countries would reach above $1.2 billion.
The Iranian minister expressed hope that signing the related economic cooperation agreements particularly one that would involve the preferential tariffs would help enhance the level of trade between the two countries.
Azadegan oil field
In a meeting with Nasution, Oil Minister Zanganeh announced that only a limited number of companies will be invited to the tender for development of Azadegan oil field.
Zanganeh pointed to good and friendly relations between the two nations and the deepening of bilateral ties following implementation of the Joint Comprehensive Plan of Action (JCPOA) saying “in addition to imports of oil products, Pertamina Corporation also holds partnership with NIOC in the field of expanding Iranian oil fields.”
The official, while referring to exports of a one-million-barrel cargo of crude oil to Indonesia, asserted “the first shipment was experimental as talks will be held over increasing the exports volume once relevant tests are carried out in Indonesian refineries.”
Iran’s petroleum minister said Indonesia, in addition to crude oil, has also purchased Iranian Liquefied Natural Gas (LNG) stating “Indonesia remains a large South East Asian market for crude oil and petroleum products and holds great significance for Iran.”
1st post-sanctions oil cargo
For the first time after the lifting of the west-imposed sanctions, an Iranian oil tanker left the country to deliver its cargo to Indonesian Cilacap Refinery in mid-February.
Iranian oil delivery to Indonesia comes at a time when Tehran and Jakarta have started serious talks for expansion of joint investments.
According to the two sides’ recent negotiations the Southeast Asian nation will contribute to Iran’s upstream oil sector and Iran will invest in refining and downstream sector of Indonesian oil industry.
According to media reports, Indonesia is presently producing 817,000 barrels of oil per day and imports exactly the same amount, but the estimates say that Indonesia will be able to produce only 550,000 barrels of oil per day by 2020.
Iran-Indonesia cooperation in operationalizing Ab Teymour and Mansouri oilfields in Iran can be considered as another positive step by the two strategic partners in the energy sector.
In spite of Iran-Indonesia cooperation in the energy sector which is needed by the two sides, their collaborations are not restricted to this field.
Some figures indicate that Iran's non-oil export to Indonesia surpassed $50 million in the first six months of the current Iranian year (March 20, 2016-September 20, 2016) showing a 40-percent growth as compared with the previous year's corresponding period.
Indonesia also exported different products such as palm oil, paper, coffee, tuna fish, auto parts and wood pulp for paper industry amounting to 117,800 tons.
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