'Iraq war won't affect Indonesia's refinery'

The Jakarta Post, Jakarta

State oil and gas company PT Pertamina expressed confidence on Wednesday that the possible war in Iraq will not affect the operation of its refinery in Cilacap, Central Java which is still fed with crude oil from the Middle East country.

Indonesia has for years imported the Bashra light crude oil from Iraq to feed the country's largest refinery.

The refinery, which supplies fuel across Central Java and East Java, has been built on a specific design that only fits with light crude oil from the Middle East.

"The Iraq war will not disrupt crude imports for the Cilacap refinery as we already adopted a multisource scheme.

"Should the Iraq war break out and Iraq is forced to suspend its crude exports, Pertamina will easily switch the import source to Iran or Saudi Arabia," Ridwan Nyak Baik, Pertamina's spokesman, told The Jakarta Post.

Fears about the Iraq war have mounted as the United States increases its military build up in the region.

On Tuesday, the U.S. Central Command, which would run any military operation against Iraq, was moving war planners to a base in Qatar from its Florida headquarters, U.S. defense officials were quoted by Reuters as saying.

Ridwan did not detail the volume of crude imported by Pertamina from Iraq, but prior to the Gulf War in 1990, Indonesia imported about 30,000 barrels per day under a counter purchase agreement. Iraq received commodities like timber, steel and tea in return.

The war brought the imports to a halt until Indonesia signed an agreement with Iraq to resume the imports in 1999 under the oil-for-food deal with the United Nations.

Under the deal, Iraq was allowed to export its crude to buy food and medicine.

Pertamina operates nine refineries with a combined processing capacity of above 1.02 million barrels of oil per day.