Investors invited to produce lube oil in joint venture
Investors invited to produce lube oil in joint venture
JAKARTA (JP): Pertamina state oil company is inviting foreign and domestic investors to set up joint ventures to produce synthetic lubricating oil domestically.
"The synthetic lubricant business is very promising in the country not only because demand for high-quality lubricants is now on the rise, but also because raw materials can be easily imported without restrictions," the company's president Faisal Abda'oe said yesterday.
Speaking at a ceremony to launch the maiden sales of Pertamina's new lubricating oil, Mesran F-1 Full Synthetic, at its headquarters, Abda'oe said the government is urging the setting up of joint ventures for producing lubricating oil for export.
"We have thus far made a joint venture with Mobil Oil of the United States for producing Mesran F-1 Full Synthetic, which is introduced today," he said.
The new lubricant is made from non-hydrocarbon oil, which is mixed with various chemical substances, including ether.
Abda'oe said both parties spent around US$100 million for establishing a lubricant blending plant in Tanjung Priok, North Jakarta, with an initial output capacity of 200,000 kiloliters a year.
"Pertamina and Mobil Oil also have agreed to set up other blending plants in Surabaya, Ujungpandang and Medan," he said. "But the establishment of the three plants is still open to other parties interested."
He told The Jakarta Post that Pertamina is committed to controlling around 70 percent of the shares of the planned ventures.
He said several investors have shown interest in the planned Surabaya plant, which may need an investment of $100 million.
Crude oil
Abda'oe said Pertamina prefers synthetic materials for the production of lubricants in order to reduce the use of crude oil for domestic purposes even though the raw materials are still imported from the United States and France.
Legowo Dradjad, Pertamina's junior director for domestic marketing and procurement, claimed that the quality of synthetic lubricating oil is the same as crude oil-based lubricants as shown by the result of laboratory research at Mobil Oil.
"Studies indicate that synthetic lubricants are suitable for cars made in the 1990s," he told reporters.
He pointed out that the preliminary results of road tests in the United States showed that Mesran F-1 Full Synthetic can be used for running engines for over 10,000 kilometers.
"The price of the new lubricant is also less expensive than imported lubes, such as Motul, Valvoline and Castro," he told the Post.
He added that the new lubricant could be used for both diesel and gasoline automotive engines.
Pertamina is currently producing 25 brands of lubricants for car engines, car gears and industrial machinery. (fhp)