Four projects for export-oriented oil refineries approved
JAKARTA (JP): The Investment Coordinating Board (BKPM) has approved commitments for the construction of four export-oriented oil refineries in South Sulawesi, North Sumatra and East Java with a combined investment of US$7.2 billion.
"The four planned refineries, which will process crude oil from the Middle East, will be constructed by private companies under a foreign investment licensing scheme," Minister of Investment Sanyoto Sastrowardoyo told a hearing with Commission VI of the House of Representatives (DPR) here on Friday.
Two of the refineries, to be built in East Java, will be constructed by PT Buana Ganda Perkasa, with an investment of $3.50 billion, and PT Asia Pacific Petroleum with funds of $1.09 billion.
PT Sabang Oil Refinery will construct an oil refinery in Sabang, Aceh, with an estimated investment of $1.58 billion and PT Indo Mudi Oil Corp. is to set up a refinery in Pare Pare, South Sulawesi, with an investment of $1.03 billion.
"Minister of Mines and Energy I.B. Sudjana has also approved the planned refineries," said Sanyoto, who is also the chairman of BKPM.
He said that all the products of the planned refineries will be exported.
"In marketing their processed oil overseas, the companies need not cooperate with the state oil company Pertamina," he said as quoted by Bisnis Indonesia daily.
A member of Commission VII, meanwhile, urged BKPM to involve Pertamina in the oil refinery and marketing activities on the grounds that the oil industry is considered a strategic industry which should be supervised by the government.
"Indonesia's Law No. 44/1966 even requires any investors in the oil industry to set up cooperation with Pertamina to construct and operate oil refineries," a commission member, Mandji said.
The rule also requires Pertamina to get involved in oil industry activities, including exploration, exploitation, production, refining and marketing, he added.
East
In addition to the four planned refineries, BKPM is now also processing the license for another planned oil refinery, which will be built by a foreign investor in Sorong, Irian Jaya.
He gave no details on the Sorong refinery, but said the government is committed to promoting investment activities in the nation's eastern provinces.
He said that during the period from July 16 through Aug. 15 this year, BKPM approved nine new domestic investment projects worth Rp 267.83 billion ($123.14 million) in the eastern part of the country.
BKPM also approved four new projects under a foreign licensing scheme with a combined investment of $69.21 million in the eastern provinces during the same period, he said.
The projects in the eastern provinces are among the 56 new and 24 expansion projects approved by BKPM under a domestic investment scheme during the period, with total investment commitments of Rp 2.14 trillion throughout the country, and the 78 new and 15 expansion projects with combined commitments of $7.91 billion under a foreign investment scheme. (fhp)