Patra SK - News
Sep 27, 2015
Saudi Aramco Said to Eye $10b Investment in Indonesian Oil Refineries


Jakarta - Saudi Aramco, the world’s biggest oil company, is reportedly planning to build a new refinery in Indonesia and help state-owned Pertamina upgrade three of its existing facilities.


The new refinery, in Tuban, East Java, will reportedly have a production capacity of 300,000 barrels a day, or a third of Indonesia’s total current capacity, according to Energy and Mineral Resources Minister Sudirman Said.


He also claimed that Saudi Aramco would be involved in upgrades to Pertamina’s refineries in Dumai, in Riau province; Balongan in West Java; and Cilacap in Central Java.


“The initial investment will be about $10 billion,” Sudirman said.


Representatives from Saudi Aramco could not immediately be reached for confirmation.


Sudirman claimed the company had requested a tax holiday in light of its investment, and that the Finance Ministry was amenable to providing a tax holiday of up to 20 years.


Finance Ministry officials could not immediately be reached for confirmation.


Sudirman also claimed that Saudi Aramco would be a partner rather than a rival to Pertamina.


“We will sit down with them and with Pertamina soon to find out what are the gaps [in the negotiations],” he said.


Pertamina president director Dwi Soetjipto said there were other potential investors besides Saudi Aramco interested in developing refineries in Indonesia.


“We will evaluate. Most important is how to get it done,” he said.


Indonesia’s six refineries, owned by Pertamina, have a combined capacity of just 649,000 barrels per day, against domestic consumption of 1.26 million barrels per day.


Officials say the country needs at least two new refineries to fill in the gap.



Source : Jakarta Globe

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