RI needs US$15 billion in refinery investment
RI needs US$15 billion in refinery investment
Fabiola Desy Unidjaja, The Jakarta Post, Jakarta
Indonesia will need about US$15 billion in investment for the
construction of four oil refineries over the next four years in
order to cut down on crude oil imports.
Minister for Energy and Mineral Resources, Purnomo
Yusgiantoro, said on Tuesday during a discussion hosted by the
Indonesian Chamber of Commerce and Industry (Kadin) that current
oil production has been insufficient to meet increasing demand in
the domestic market.
Continuing to import crude oil would only burden the state
budget, he added.
"We have another choice, and that is to improve infrastructure
in the oil and gas sector, including the construction of the four
oil refineries, transportation systems, and storage systems for
trading purposes."
Purnomo said that each oil refinery would cost around $1
billion, but that it was important to minimize crude oil imports,
he said.
Due to the large sums of money required for infrastructure
development, the government welcomed private sector participation
in the projects.
The country's domestic demand for fuel has increased by 7
percent in average in the past five years but domestic oil
production has been on the decline, with the country only
producing one million barrels per day.
Indonesia must therefore import crude oil in large quantities
to fulfill demand.
Purnomo also spoke on state oil and gas company Pertamina's
preparations in ending its public service obligations by November
2005.
He said his ministry has issued some preliminary permits to
allow investors to begin fuel processing.
"However, we will not issue permanent permits to them if the
investors fail to complete several requirements within a two-year
time period."
By November 2005, the government will open the door for the
private sector to operate gas stations nationwide, a sector
presently monopolized by Pertamina.
Purnomo said that only a few investors have started to build
gas stations.