Elnusa gets approval to team up with Venezuela's PDVSA in refinery project

The government and the state owned oil and gas company Pertamina has given an approval to PT Elnusa to cooperate with Venezuelan oil company Petroleos de Venezuela SA (PDVSA) in the development of a refinery project in Indonesia, Bisnis Indonesia reported Tuesday.

The approval was given during a meeting between the board of directors of PT Elnusa and Minister of Energy and Mineral Resources Purnomo Yusgiantoro in Jakarta Monday evening. Representatives of the Venezuelan company also attended the meeting.

Elnusa's president director Rudy Radjab said Monday that the government had strongly supported the Venezuelan company's plan to invest up to US$1 billion in the refinery project which would cost about US$4 billion to build.

"But the government wants us to carry out a comprehensive feasibility study to ensure if the project is really feasible," he was quoted as saying by the newspaper.

He said that the signing of the memorandum of understanding (MOU) agreement on the construction of the refinery plant would be witnessed by President Susilo Bambang Yudhoyono and Venezuelan President Hugo Chavez. But the time and the place for the signing have not been arranged, he added. "It will be part of the government to government cooperation," he said.

Pertamina has also given its approval to its subsidiary Elnusa to build the refinery plant with PDVSA. "It is no problem for Elnusa to do business with PDVSA. Moreover it is business to business deal, " he said.

Rudy said earlier that in addition to PDVSA, Elnusa would also cooperate with National Iranian Oil Refinering and Distribution Company (NIORDC) to build the proposed refinery plant, which would be built either in Tuban, East Java or in Banten.

Besides providing cash, the Venezuelan company would also provide crude oil supply of up to 150,000 barrels per day for the refinery plan which would need total crude oil supply of about 300,000 barrels per day. (*)