Bumi Siak Pusako to enter downstream sector

PT Bumi Siak Pusako (BSP) Zapin, a firm owned by the Siak regency administration in Riau province, plans to expand business to the downstream sector by building crude oil and crude palm oil (CPO) processing industry, Bisnis Indonesia reported on Monday.

Company director Feldiansyah said the facilities will be built at the Tanjung Buton Industrial Zone (KITB), adding the business is promising because Riau is the largest producer of crude oil and CPO in Indonesia.

?Ria can produce up to 10 million tons of CPO per year and around 300,000 bpd of crude oil per day. We see this opportunity and will build a downstream industry in KITB,? he said, adding that the development of the project is expected to start this year.

He said the project will require huge funds, while the firm?s financial resources are limited and the firm does not want to ask for capital injection from the local administration. The firm will thus create partnership with a third party to build the project.

The firm has chosen PT Bosowa Corporindo as partner to build the project and both firms recently signed a memorandum of understanding (MoU) on partnership to develop the project in the presence of Vice President Yusuf Kalla.

At present, BSP has a business in partnership with state owed oil and gas firm PT Pertamina to develop the Coastal Plain Pekanbaru (CPP) block in Riau. (*)