Indonesia looks for Gulf investment in refineries: Report
Tuesday, September 20 2005 - 09:30 AM WIB
Faisal Bafadal, Indonesian ambassador to the UAE, told Gulf News that Indonesia was looking to the UAE to invest in oil refining as the country was already the largest importer of Indonesian goods in 2004 with $744 million.
"We're looking at the UAE and other Gulf countries to invest because having oil refineries in Indonesia will help reduce import costs in order to satisfy domestic demand," he said.
"Even though Indonesia is an exporter of oil, we don't have enough oil refineries to produce petroleum to satisfy domestic consumption," Faisal added. He was speaking on the sidelines of a press conference on Indonesia's third Solo Exhibition at the Expo Centre in Sharjah.
Faisal said the present situation in Indonesia was conducive to investments as the country was more peaceful and stable since the signing of a peace deal between Aceh rebels and the government.
Faisal said the country was also more stable politically after its first democratically-elected president took office last year with a vow to crack down on corruption. Indonesia was cited as one of the most corrupt countries in the world in 2004 by Berlin-based Transparency International, with a ranking of 133 out 145.
To aid investments, Faisal said the government was providing bureaucratic 'shortcuts'. "We are in the process of relaxing procedures for investors and providing them with shortcuts. There won't be as much bureaucracy."
He said the most common bureaucratic hurdle was the lengthy and convoluted application process.
Faisal said Indonesia produced 1.1 million barrels of oil per day (bpd) of oil in 2004, while domestic consumption stood at 1.4 million bpd. Import and export figures for the year were unavailable.
In 2003, Indonesia produced 971,000 bpd, of which 518,100 bpd were exported. To offset demand of 1.183 million bpd, Indonesia had to import 370,500 bpd the same year.
Analysts have said the country's high demand for oil, which the government made up for by importing oil from other countries, meant Indonesia was unable to reap the benefits of high oil prices. (*)