Planned refinery in S. Sumatra hoped to benefit Quest
Saturday, June 23 2012 - 03:09 AM WIB
ASX-listed firm Quest Petroleum NL said that the Indonesian government had recently announced that it intended to build a Rp 90 trillion (US$9.5 billion) crude oil refinery in South Sumatra in 2013, in order to meet increasing domestic fuel requirements.
"This is a very positive development for the South Sumatran oil industry at a time when Quest is expanding its activity there and preparing to drill at its Ranau PSC (South Sumatra)," Quest Petroleum Chairman Gus Simpson stated.
He said that the decision to construct a refinery of the scale demonstrated the significant increase in domestic demand for fuels as well as the level of investment the government had been committed to realize in the region.
The Government is currently confirming the suitability of the intended location and expect to commence construction of the refinery in 2013, with estimated completion and operation start-up in 2017.
The State oil and gas company Pertamina will construct the refinery, which is expected to have capacity of 300,000 barrels of oil per day.
The Government?s decision comes as existing refinery capacities in Indonesia are no longer sufficient to meet the soaring levels of oil consumption in the region.
Quest Petroleum is currently preparing to drill its first exploration well in the highly prospective Ranau PSC. The lo?ation for the initial well has now been finalized and drilling rigs and materials are being sourced in preparation to drill.
Over the past 12 months exploration in South Sumatra has seen multiple wells with commercial oil and/or gas shows. Several of these discoveries are currently under development with the intention to sell hydrocarbons to domestic and foreign markets.
Editing by Benget Besalicto Tnb.