Crisis hampers oil refinery projects<\/p>\n
JAKARTA (JP): The Investment Coordinating Board (BKPM) said on
\nThursday that none of the 20 oil refinery projects approved since
\n1992 had been started.<\/p>\n
\"As of today, none of the projects we approved have begun
\nproduction or have been realized,\" the board said in a statement.<\/p>\n
BKPM said since 1992 it had approved 20 oil refinery projects
\nworth over US$38.3 billion, comprising two domestic direct
\ninvestments worth Rp 28.5 trillion ($3 billion at the current
\nrate) and 18 foreign direct investments worth $35.3 billion.<\/p>\n
It said the economic crisis in 1997 had prevented investors
\nfrom developing their projects on schedule.<\/p>\n
However, BKPM said, several investors were now preparing the
\nconstruction of their refineries.<\/p>\n
\"All the projects plan to export their entire oil output,\" it
\nsaid.<\/p>\n
Investors' interest in building oil refineries in Indonesia
\nbegan when talks abounded that the country planned to partly
\nliberalize its domestic oil market under a new oil and gas law.<\/p>\n
The local investors involved in the projects, either through
\nlocal companies or foreign joint ventures, mostly had connections
\nwith former president Soeharto or were associates of his family.<\/p>\n
Among them was the son of former president Soeharto, Bambang
\nTrihatmodjo, who planned to build two refineries in Situbondo,
\nEast Java, and Bontang, East Kalimantan.<\/p>\n
Bambang's firm received an investment approval from BKPM in
\n1994 for the $1.09 billion Situbondo refinery and in 1995 for the
\n$366 million Bontang refinery.<\/p>\n
Probosutedjo, who is Soeharto's stepbrother, also received a
\npermit from BKPM in 1994 for his $3.5 billion refinery project in
\nProbolingo, East Java.<\/p>\n
Soeharto's golf partner, Mohammad \"Bob\" Hasan, has a 10
\npercent stake in a joint venture with Japan's Mitsubishi
\nCorporation for the construction of a $1.25 billion refinery in
\nWest Nusa Tenggara.<\/p>\n
Other foreign companies that took part in the projects were
\nBritish Petroleum (BP) Asia Pacific, which planned a $1.5 billion
\noil refinery in Riau, and Japan's Mitsui & Co. Ltd., which
\nplanned a $3.15 billion refinery also in Situbondo.<\/p>\n
UK-based Mayhill International Trading & Services Limited,
\nwhich planned to build a $1.4 billion refinery in Sumbawa,
\nexpressed on Thursday its determination to go ahead with the
\nproject.<\/p>\n
Mayhill chairman Gehad Dairawan said his company was upbeat to
\nstart the operation by September 2005.<\/p>\n
The company plans to export its oil to Malaysia, China, the
\nPhilippines and Japan, but would set a portion aside for domestic
\nconsumption.<\/p>\n
He said Asia-Pacific countries would in the future become the
\nworld's largest oil importers.<\/p>\n
Mayhill's refinery would have an oil output of 150,000 barrels
\nper day, and would receive its oil supply from Iran, the company
\nsaid.<\/p>\n
Last month, BKPM approved two oil refinery projects valued at
\n$6 billion that were to built by a joint venture in Pare-Pare and
\nBatam.<\/p>\n
PT Kilang Minyak Intan Nusantara, a joint venture of investors
\nfrom Saudi Arabia, China and Indonesia, said it would start
\ncommercial production some time in the fourth quarter of 2004.
\n(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/crisis-hampers-oil-refinery-projects-1447893297",
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