Upset, Indonesia to Build Oil Refinery

VIVAnews – The government will build a 300,000 barrel-oil refinery with a total investment of Rp90 trillion (US$9.5 billion). The construction of the refinery will use the State Budget with a multiyear-scheme. 

Director General of Oil & Natural Gas, Evita Herawati Legowo, said that the construction is carried out following the delay in refinery building by both foreign private and national companies in terms of refinery construction agreement. 

“There are two conditions on the refinery building: sustainability of crude oil supply and large investment. In this case, the government wants to cut the latter by building refinery,” said Evita in Jakarta, on Monday.

Evita said that the plan to build refinery has been approved by the Finance Minister. In the 2013 State Budget, the government has included a construction budget worth Rp 1 trillion for a feasibility study in an effort to seek the best location as well as to determine the supply of crude oil.

The construction is expected to set out in 2015 and to be completed in 2019.

The government plans to team up with Pertamina in working on the project.  Evita said Pertamina will play a major role in the construction process.

The government’s latest refinery construction was set in 1994 in Balongan.  Until now, two foreign oil and gas companies have intended to build a refinery in Indonesia: Saudi Aramco and Kuwait Petroleoum Company. However, no clarity has been made between them on the incentive issue. 

“It's been long enough. Yet, no progress has been made. The government is upset about it,” said Evita.