Hi-Tech of Saudi Arabia may quit Tuban refinery project

Pertamina will go ahead with its plan to build an oil refinery plant in Tuban, East Java if its partner High-Tech International Group of Saudi Arabia withdraws from the project, Republika daily reported on Saturday.

Pertamina?s director for downstream operation Muchsin Bahar said in Jakarta on Friday that the Saudi company was given until April this year to decide whether it wanted to continue or to quit the project. ?If there is no good development, the contract will be cancelled,? he said.

According to him, under the initial agreement, High-Tech will provide the crude oil to feed the refinery, as well as to provide funds for the construction of the refinery. But the terrorist attack against the United States in September last year caused a major blow to the company?s operation. The company has suffered a serious financial problem since then.

Muchsin said that he was optimistic that Pertamina would be able to raise funds from local and international banks to finance the project. The crude oil to feed up the refinery would be taken from the Cepu oil field, which is estimated to be able to produce about 200,000 barrels per day in the next few years, he said.

Earlier Pertamina?s president director Baihaki Hakim said he was optimistic that the High-Tech would be able to finance the US$2 billion refinery project despite its financial difficulty. ?If not, then we will seek a new partner,? he said. (*)