Indonesia will need 3 oil refineries in 2015

Indonesia will need at least 3 new refineries in 2015 if it wants to avoid fuel oil (BBM) deficit, said Evita H. Legowo, director general of oil and gas at the ministry of energy and mineral resources in Jakarta on Thursday.

Speaking during a meeting with the Indonesian Chamber of Commerce and Industry (KADIN), she said that with the growth of fuel oil demand at 4 percent per year and total production of 677,000 barrels per day, then the local need of fuel oil by the year 2015 is predicted to reach 1,294,000 barrels per day.

According to her, the total capacity of local refineries now is only 1,157,000 barrels per day. In 2010, the production of fuel oil was 676,000 barrels per day and the local need stood at 1,064,000 barrels per day, causing a deficit of 388,000 barrels per day or 36 percent of the total need.

Next year, the BBM deficit is estimated to reach 617,000 barrels per day or 48 percent of the total need.

"We hope that the new refineries can be realized. But we know that it is not easy to develop oil refinery," she said.

She hoped that the Indonesian businessman can cooperate with state-owned oil and gas Pertamina to develop the oil refineries.

"We've wanted the refinery development since 1998. But it hasn't been realized until now. Now, we're trying to get incentives from the ministry of finance in order to encourage such development," she added.

The last refinery developed in Indonesia was Balongan refinery, which was constructed in 1994, while the other refineries were developed in 1970s. The Balongan refinery can earn a reasonable profit, but the others, due to their old ages, can only contribute a very small margin. (romel)