Sumitomo may invest in oil refinery project

Sumitomo Corp., Japan?s third-largest trading company, may invest in a proposed oil refinery in Indonesia, joining Iran and Venezuela.

Sumitomo may take a 20 percent stake in the 300,000 barrels-a-day plant, Rudy Radjab, president of the unit of state oil company PT Pertamina leading the project, said in Jakarta Tuesday. The refinery will export 70 percent of its products and sell the rest to the domestic market.

?We may export the fuel products to Japan, subject to talks with Sumitomo,? Radjab told reporters.

Indonesia imports one-third of its fuel because its processing capacity of about 1 million barrels a day is insufficient to meet demand. Iran, the world?s fourth -largest oil producer, will provide half of the crude needed for the planned refinery, to be built by Pertamina?s subsidiary PT Elnusa Harapan. Venezuela will supply the other half.

Petroleos de Venezuela SA, South America?s largest oil company, will sign an agreement with Elnusa to take a 25 percent stake in the venture next week in Vienna during the meeting of the Organization of Petroleum Exporting Companies (OPEC), Radjab said.

The Indonesian company signed an initial agreement with National Iranian Oil Refinery & Distribution Co. on May 10. The Iranian company will take a 25 percent stake in the planned refinery, which will cost an estimated $4 billion.

Chinese investors won?t take part in the project and the refinery won?t export fuel to China as earlier planned, Radjab said. ?It?s difficult to be in a venture with China as they want majority share in the plant,? he said.

Rudy said earlier that will be build the proposed refinery plant in Tuban, East Java or in Banten. (godang)