Limited crude oil supply affects refinery projects
Limited crude oil supply affects refinery projects
JAKARTA (JP): A limited supply of crude oil and the lack of
financing resources have slowed down the construction of oil
refinery projects in the private sector, an executive of the
state-owned oil company Pertamina says.
"Of the investors for seven refinery projects approved by the
Investment Coordinating Board (BKPM) last year, none has been
ready to start construction," Pertamina's director for
processing, G.J. Atihuta, told reporters here yesterday.
The sponsors of the seven refinery projects are PT Tanjung
Uban Refinery in Tanjung Uban of Riau, PT Sumber Catur Daya
Nusantara Corp. in Pare-Pare of South Sulawesi, PT Asia Pacific
Petroleum in Situbondo of East Java, PT Sabang Oil Refinery in
Aceh, PT Buana Ganda Perkasa and Wisertech Ltd. in Probolinggo of
East Java, PT First Indra Corp. in Sorong of Irian Jaya and PT
Norco Internusa and Foster Wheeler in Gresik of East Java.
All of the investors have actually finalized their feasibility
studies, but most of them are worried about the consistent supply
of crude oil, Atihuta said.
"It is totally up to them to get supplies of crude oil either
from private domestic or overseas suppliers, instead of relying
on Pertamina," he said.
He noted that at least 33 investors have applied to Pertamina
for the establishment of oil refineries, which are now offered to
the private sector.
Pertamina currently monopolizes the operation of oil
refineries in the country.
Financing
In addition to the difficult supply of crude oil, Atihuta said
that private investors are also confronted with the lack of
financing resources for their projects.
"It is understandable because one refinery project with a
processing output of 100,000 barrels per day (bpd) may cost at
least $1 billion," he argued.
Buana Ganda Perkasa, for example, has a commitment of
investing $3.50 billion for its project, Asia Pacific Petroleum
$1.09 billion and Sabang Oil Refinery $1.58 billion, he said.
Antara news agency quoted Atihuta as saying in Samarinda on
Wednesday that Pertamina is now upgrading its refinery in
Balikpapan to increase its processing capacity from 250,000 bpd
at present to 267,000 bpd.
"Pertamina has appointed PT Citra Sena Wibawa to upgrade the
plant at a total cost some $170 million," he said. (fhp)