Foreign firm to build oil refineries

Japanese and Middle Eastern companies are interested in building oil refineries in Indonesia amid growing demand for oil products in the country, a senior official said on Thursday.

Downstream director of state-owned oil and gas firm PT Pertamina Harry Purnomo said Japan's Mitsubishi Corp. and Mitsui Co. are among the interested investors.

He did not specify potential Middle Eastern investors, saying only they were from Iran and Kuwait.

"They are currently conducting feasibility studies," Harry said.

If the foreign investors proceed, the government expects the refineries to be built in East Java, the second largest fuel consuming area in Indonesia after Jakarta, Harry said.

No additional information on the investors' plans, including the potential size of the refineries, was available, he added.

Indonesia currently has seven oil refineries operated by Pertamina.

The country's oil and gas authorities are working hard to boost investment activities in the sector. The government has been offering several new oil and gas blocks to investors. In a bid to attract new investment into the sector, the government has also offered investors greater revenue share. -- Dow Jones