Pertamina turns down Setdco?s offer to jointly build Tuban refinery plant

The president of PT Setdco Energy Setiawan Djody has asked state owned oil and gas Pertamina to clarify why the latter refused to cooperate with his company in the construction of a oil refinery plant in Tuban, East Java, Bisnis Indonesia reported on Saturday.

"We submitted a formal proposal to jointly build the oil refinery plant in May this year, but our offer was turned down by Pertamina," he was quoted as saying. In the letter Setdco proposed Pertamina to build a refinery plant with a capacity of 300,000 barrels per day.

He said that Setdco had received full support from its partners overseas both financially and technically to carry out the refinery project but he refused to unveil the amount of funds, which would be allocated to finance the projects. He did not also name his foreign partner.

"The problem is why Pertamina allows Hi-Tech to take part in the project," he said.

Setiawan disclosed his disappointment after Pertamina announced that it still expected H-Tech International Group of Arab Saudi to build the state owned oil and gas company?s planned refinery plant in Tuban.

The construction of the plant was initially scheduled for early this year but it was delayed because Hi-Tech backed out of its commitment to finance the project. Under the earlier agreement, Hi-Tech agreed to provide funds of about US$2 billion to finance the construction of the project. The company would in return receive 80 percent ownership of the refinery plant.

Pertamina?s director for downstream operation Muchsin Bahar said that Hi-Tech would again be given an opportunity to join the refinery project although the company had in the past withdrawn its plan to become one of the project financiers. (*)