Nusamba to develop oil refinery

JAKARTA (JP): The Nusamba Group plans to develop an oil refinery in cooperation with a foreign partner, the group's chairman Muhammad "Bob" Hasan said yesterday.

Hasan said after meeting with President Soeharto at Merdeka Palace that the group had yet to select the location of the refinery plant nor its foreign partner.

But he hinted that the plant would probably be located in the eastern part of Indonesia and the project would start one year from now.

Nusamba is one of several investors which have expressed an interest in the downstream oil industry.

Pertamina's president Faisal Abda'oe earlier said there were two companies planning to develop oil refineries in Probolinggo and Situbondo, East Java.

One of the companies is PT Buana Ganda Perkasa, owned by Probosutedjo, which plans to develop a refinery plant in Probolinggo with US$3.5 billion investment.

The other company is Asia Pacific Petroleum of Britain which plans to build a refinery plant in Situbondo with $1.54 billion investment.

Pertamina data says Buana Ganda Perkasa received approval from the Investment Coordinating Body in July 1994 and Asia Pacific Petroleum in July 1995.

President Soeharto recently issued a decree allowing private companies to set up oil and gas refineries by themselves or in a joint venture with Pertamina.

The decree says Pertamina will remain the sole distributor of private fuel on the domestic market at a negotiable price.

Abda'oe said Pertamina had not yet negotiated a price with any company wanting to develop oil refineries.

At present, Pertamina operates eight refineries with a combined capacity of 989,500 barrels a day.

According to Pertamina data, domestic fuel consumption grew by 6 percent to 50.19 million kiloliters in 1996/1997, 22.5 percent or 11.34 million kiloliters of which were imported.

Abda'oe said Indonesia needed additional refineries with a combined capacity of 350,000 barrels per day by the year 2000. (jsk)