Aramco Interested in Building Oil Refinary in Indonesia

Saudi oil company Aramco is interested in building an oil refinery with a capacity of 400,000 barrels a day in Indonesia in cooperation with Indonesia`s state-owned oil company Pertamina. Aramco disclosed its intention of building an oil refinery in Indonesia if feasible, Deputy Managing Director of Pertamina Iing Arifin Tahiya told reporters. The Saudi company stated the desire to initiate cooperation with Pertamina in building a new oil refinery when President Soesilo Bambang Yudhoyono visited Saudi Arabia recently.

About the location of the oil refinery to be built by Aramco, Arifin said it depends on the result of the feasibility study. But he did not rule out the possibility of the new oil refinery in Tuban, East Java, as the expansion of the Balongan oil plant.

The cooperation offered by the Saudi company for the construction of the oil refinery has not been followed by the signing of a MoU, Arifin said. He estimated the cost of building an oil refinery with a capacity of 400,000 barrels/day at US$4 billion.

As the only state-owned oil company in Saudi Arabia, Aramco operates oil refineries with a total capacity 10 million barrels/day in that Middle East country.

Indonesia`s oil refineries have a total capacity of only 1 million barrels/day, whereas their total production currently averages only about 850,000 barrels/day, below the domestic demand for 1.1 million barrels/day, so Indonesia has to import 350,000 barrels/day.

To meet the domestic demand for fuel without import, Indonesia must build a refinery with a capacity of at least 400,000 barrels/day, as the demand for fuel in Indonesia keeps growing, he said, adding that it takes about three years to build an oil refinery with a capacity of 400,000 barrels a day.