CNOOC may take 51 percent stake in Indonesia biofuel project: Report

Chinese energy giant The China National Offshore Oil Corp. (CNOOC) may take a controlling stake in a $5.5 billion bio-fuel project in Indonesia for which a memorandum of understanding was signed in January this year, Beijing Times reported Friday.

 

CNOOC Group will hold a 51 percent stake in the project, the company's first foray in overseas bio-fuel investment, while its Indonesian local partner Sinar Mas Agro Resources and Technology and Hong Kong Energy Holdings will hold 39 percent and 10 percent respectively, according to Chen Libo, the executive director of HKC (Holdings) Ltd., the parent of Hong Kong Energy.

 

A CNOOC spokesman declined to confirm the details of the deal when contacted by Interfax, but said such details should have been finalized already.

 

Based on the shareholding structure, CNOOC will shoulder $2.8 billion of the total investment cost, Sinar Mas, $2.15 billion, and Hong Kong Energy, the remaining $550 million.

 

Chen further said he expects planting to start before the end of this year, according to the report.

 

The joint-venture project will see the plantation of 1 million hectares of palm oil, sugarcane and cassava in Papua and Kalimantan over the next eight years to process bio-diesel from the former and bio-ethanol from the latter two crops, according to a Sinar Mas statement released in January. (*)