UK investor to build refinery plant in West Nusa Tenggara
Friday, November 24 2000 - 02:00 AM WIB
United Kingdom-based Mayhill International Trading & Services Limited planned to build a US$1.4 billion refinery in Taliwang, Sumbawa, West Nusa Tenggara, amid the low realization on the construction of private refinery projects.
Mayhill chairman Gehad Dairawan said on Thursday his company was determined to go ahead with the project and upbeat to start the operation by September 2005.
The company plans to export its oil to Malaysia, China, the Philippines and Japan, but would set a portion aside for domestic consumption.
He said Asia-Pacific countries would in the future become the world's largest oil importers.
Mayhill's refinery would have an oil output of 150,000 barrels per day, and would receive its oil supply from Iran, the company said.
When it is completed, Mayhil's refinery plant would be the third private oil refinery in the country, following plans by a Saudi-China-Indonesia joint venture company to build two oil refinery projects in Pare Pare, South Sulawesi and Batam, Riau, valued at $6 billion.
PT Kilang Minyak Intan Nusantara, a joint venture of investors from Saudi Arabia, China and Indonesia, said it would start commercial production sometime in the fourth quarter of 2004.
Meanwhile, the Investment Coordinating Board (BKPM) revealed that that none of the 20 oil refinery projects approved since 1992 had been started.
"As of today, none of the projects we approved have begun production or have been realized," the board said in a statement.
BKPM said since 1992 it had approved 20 oil refinery projects worth over US$38.3 billion, comprising two domestic direct investments worth Rp 28.5 trillion ($3 billion at the current rate) and 18 foreign direct investments worth $35.3 billion.
It said the economic crisis in 1997 had prevented investors from developing their projects on schedule.
However, BKPM said, several investors were now preparing the construction of their refineries, including Mayhill and Kilang Minyak Intan Nusantara.
"All the projects plan to export their entire oil output," it said.
Investors' interest in building oil refineries in Indonesia began when talks abounded that the country planned to partly liberalize its domestic oil market under a new oil and gas law.
The local investors involved in the projects, either through local companies or foreign joint ventures, mostly had connections with former president Soeharto or were associates of his family. (*)