Pertamina sends team to conduct due diligence on SRC

State oil and gas firm has sent a team to conduct due diligence on Singapore Refinery Company (SRC) after BP Plc had offered its one third stake at the 285,000- barrels- per-day refinery, which is also owned by SPC and Caltex, Pertamina?s downstream director Muchsin Bahar said on Monday.

Muchsin, however, said that currently purchasing a stake at foreign refinery was not the company?s main priority.

?While the acquisition would boost Pertamina?s refinery capacity and may help domestic fuel supply security, it must be remembered that the return on investment in refinery business is so small. The money could be better invested somewhere else,? he said.

?Moreover, at present global economic slump, there will be some excess refinery capacity across Asia, which may further push the refining fee down.?

?Therefore, unless the price of the SRC stake is healthily discounted we won?t go for it,? he added.

Muchsin said Pertamina would be seriously considering the stake at SRC if the internal rate of return (IRR) could reach at least 12 percent. (alex/godang)