Indonesia would be Signed Contract with 4 Foreign Oil Companies

Oil refinery owned China National Offshore Oil Corporation's (CNOOC) in China.

Indonesia would be Signed Contract with 4 Foreign Oil Companies

This joint venture will not only ensure the supply of crude oil to refineries Indonesia, but also helped fund a major increase.

JAKARTA

Indonesia is expected to sign an agreement with CNOOC of China, Saudi Aramco and two other oil companies next week that includes direct sales and investment of oil refineries in Indonesia, according to a senior official at Pertamina.

Pertamina is in discussions with CNOOC, Saudi Aramco, PTT of Thailand and a Japanese oil company to form a joint venture that will not only ensure the supply of crude oil to refineries Indonesia, but also helped fund a major increase.

"We are looking for partners to develop the refinery and that can guarantee the security of supply," said Ahmad Bambang, director for refineries, trade and marketing, told reporters Wednesday (3/12).

"We will choose anyone that will bring maximum benefit to Pertamina and the state."

Indonesia in October decided to talk about the construction of two new refinery with Saudi Aramco and Kuwait Petroleum due to disagreements over tax issues.

"Previously, there was a problem with the tax holidays (tax exemption within a certain time), tax incentives and uncertainty about the license," said Ahmad.

"We assured them that we can move forward. Now we offer the partnership, including in marketing, not only in the development of the refinery."

Pertamina hopes to establish similar cooperation with Sonangol of Angola, and expects to complete the initial contract to provide Indonesian crude oil by 100,000 barrels per day next month.

According to an agreement signed in November, the joint venture will provide Indonesia discount for purchase of crude oil, Ahmad said, adding that these things take time.

Pertamina require an investment of up to US $ 25 billion to double the supply of crude oil from at least four existing refineries, to increase the total capacity to 1.6 million barrels per day in 2025, said Ahmad.

Pertamina also is considering the construction of two or three new refineries, each with a capacity of about 300,000 barrels per day. (Reuters)/VOA