Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, July 30 -- Indonesia’s state-owned PT Pertamina and Kuwait Petroleum Corp. plan to invest $9 billion in a joint venture 300,000 b/d refinery in Balongan, West Java.
“This is a business-to-business negotiation with the backing of each government,” said Indonesia’s Industry Minister I.S. Hidayat, adding, “The crude oil will be supplied from Kuwait Petroleum at a discount price.”
The statement coincided with other reports citing Indonesia’s state enterprises minister Mustafa Abubakar who mentioned additional potential investors, including Iran and Libya.
“Investors from Iran, Libya, and Kuwait are interested in joining in the project," Mustafa said. “Kuwait's offer seems to be the best one. We're still open to other investors.”
Analyst IHS Global Insight said the refinery capacity, as outlined, would “increase Indonesia's capacity by around a third and help to reduce the import bill as consumption continues to rise at around 5% a year.”
In January, Indonesia unveiled a long-term oil and gas management plan to attract $32 billion in investments for oil and gas facilities in 2010-14.
About 70% of the spending budget is targeted for investment in gas facilities, while the remaining 30% is for oil facilities, including rigs and refineries (OGJ, Jan. 18, 2010).
Contact Eric Watkins at [email protected].
