Pertamina, NIORDC sign JV agreement to build Banten refinery
Wednesday, March 12 2008 - 12:06 AM WIB
Pertamina President Director Ari Soemarno on Tuesday explained that within two weeks of the signing, the three parties would establish a joint venture in Indonesia to immediately start the project.
If things proceed as expected, the refinery plant will be ready by 2012, with most of the four-year period to be consumed with construction of the physical plant itself.
?We don?t know yet the possible impact of the new sanctions (adopted by the United Nations Security Council) against Iran on our project. But we hope this project will proceed as is,? Ari said.
He said Pertamina and NIORDC would each have a 40 percent stake in the new company, with Petrofield holding the other 20 percent.
Pertamina would use a combination of internal financing and loans to come up with its capital contribution to the project. The loans were expected to make up some 65 percent of the total, he said.
During Phase One, the refinery would run at 150,000 barrels of crude oil per day. Pertamina and its partners are planning to eventually expand refinery capacity to 300,000 barrels per day.
The 300,000 barrels crude oil figure translates into 200,000 barrels of fuel, or about one sixth of the country?s total needs. Currently, because of limitations in domestic refinery capacity, Indonesia imports fuel mostly from Singapore to the tune of about 400,000 barrels of crude oil equivalent daily, Ari added.
?Iran is committed to supplying half of the crude oil needs of the refinery, in other words, 150,000 barrels per day,? NIORDC president Mohammad Reza Nematzadeh said.
In addition to the oil refinery plant, Pertamina is also looking into the possibility of investing into the upstream oil industry in Iran.
Pertamina has participated in a tender for the Laleh offshore oil and gas block, in which it ranked second in the list after an Iranian oil company, Ari said.
?The Iranian company has agreed to take us as a partner in developing this Laleh oil field. So, we are looking into this possibility of entering into Iran?s upstream industry,? he said.
According to National Iranian Oil Company website, the block was one of the blocks the company offered in 2007. The website further says the winner of the block will be required to spend a minimum on 37 million euros on the block. (*)