Pertamina asked to hand over refinery projects to private companies
Wednesday, March 18 2009 - 02:27 AM WIB
Minister of State Enterprises Sofyan A. Djalil said in Jakarta on Tuesday that since the construction of the refineries would be quite costly and offered a little margin, it would be better for Pertamina to act only as an off-taker of the planned refineries.
?If Pertamina can act as an off-taker, why should it build its own oil refineries,? Sofyan said following a meeting at Pertamina's headquarters, which was also attended by Minister of Energy and Mineral Resources Purnomo Yusgiantoro.
?At present, Pertamina imports 35 percent of the country's fuel needs. Why not [in the future] it buys the fuel needs from private refineries in the country,? he said.
According to Sofyan, by handing over the construction of oil refineries to private companies, Pertmaina can use its limited funds for more productive activities.
Purnomo concurred, saying it would be better for Pertamina to hand over the projects to private companies to prevent high risks.
?But if Pertamina has its own financial resource, it can go ahead with its plan to build new refineries,? he said, adding the government had also improved the regulatory system to support the construction of such new refinery plants.
Meanwhile, Director General of Oil and Gas Evita H. Legowo suggested Pertamina retain some stake in the projects, if it finally decided to hand over the projects to private firms.
?There could be problems, if Pertamina does not have stake in the projects,? she said
Pertamina has planned to build two new refineries, one in Bojanegara in Banten and another one in Tuban, East Java. In addition, it also plans to expand the processing capacity of the Balongan refinery complex, in Indramayu, West Java.
Pertamina plans to cooperate with Iranian Oil Refining Company to build the Bojanegara refinery plant which will have a capacity of 300,000 barrels per day (bpd). The Tuban refinery is planned with a capacity of 150,000 bpd. (godang)