Indonesia revives plan to build new refinery in East Java
Monday, July 11 2005 - 09:09 AM WIB
Indonesia through state oil and gas company PT.Pertamina currently has nine refineries with a total combined capacity of around one million barrels per day (bpd), but only 70 percent of domestic oil products consumption is accounted for by those refineries, with the rest imported.
Indonesia has for some time tried to attract foreign investors to build new refineries but subsidized domestic oil products prices have made investors reluctant to realise the projects.
"The government has decided to build a refinery in Tuban. If exploration and production will be done in Cepu (block) and Jeruk field (in East Java), building the refinery is a must," Yudhoyono told reporters.
Indonesia Mines and Energy Minister Purnomo Yusgiantoro said the new refinery in East Java may have a capacity between 150,000 bpd to 200,000 bpd.
"We will open the building of that refinery for private sectors and Pertamina. The crude will come from Cepu block and Jeruk field," he said, adding that to build a refinery requires about three years.
He did not, however, suggest specific targets for starting or completing the project.
Purnomo said Cepu could produce 180,000 bpd at peak and Jeruk field could produce 75,000 bpd.
An official at state oil company Pertamina said to build a 150,000 bpd to 200,000 bpd refinery would take investment of around $1.6 billion.
ExxonMobil Corp. has reached a tentative agreement with the government of Indonesia on terms and conditions to tap huge reserves in the Cepu block, located onshore on Java island.
Pertamina has said the final agreement could be signed in September this year with ExxonMobil over Cepu which could have reserves of more than 500 million barrels of oil.
Government wants Australia's Santos Ltd. to speed up oil and gas exploration in the Jeruk field in East Java province.(*)