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iddle East countries, particularly Saudi Arabia and Iran, have upped efforts to tap into Indonesia'€™s oil refinery development amid the country'€™s plans to boost refining capacity to meet growing demand.

State-owned Saudi Aramco is currently involved in an open tender held by Indonesia'€™s state-owned oil and gas company Pertamina for the development of a refinery in Tuban, East Java, while Iran is seeking to cooperate with local firms to build another facility, according to Energy and Mineral Resources Minister Sudirman Said.

'€œWe are open to anyone who brings the greatest benefit to Indonesia. Government-to-government discussions with a number of Middle Eastern countries are ongoing,'€ Sudirman said.

Indonesia'€™s oil demand is now 1.6 million barrels per day while only around half of that is processed domestically. Refinery development plans have been overlooked in the past because projects have been considered unprofitable.

The sitting administration is again now encouraging domestic refinery development to ensure energy security. Several countries have conveyed their interest in taking part in Indonesia'€™s refinery and infrastructure development.

'€œSaudi Aramco has the potential to win because it is already involved in a Cilacap revamping project [with Pertamina] and has promised crude oil supply and investment in the petrochemical industry,'€ Sudirman said.

He was referring to a recent deal by Saudi Aramco and Pertamina to team up and improve the capacity of the Cilacap refinery, with an estimated investment total of US$5.5 billion.

Meanwhile, with Iran, Sudirman said the government was in discussions about cooperation in other energy sectors.

'€œIran is interested in cooperating with private national firms to build refinery capacity and we are interested in cooperations in the electricity sector. All this is in discussion while we wait for the [international] embargo to be lifted from Iran,'€ he added.

Pertamina is currently organizing an open tender to seek a partner for its Tuban refinery while waiting for a government regulation regarding refinery development in which the company is expecting to receive a direct assignment for the project.

As many as 12 companies have announced their interest in the bid, according to Pertamina director for refining Rachmad Hardadi, including JX Nippon, Saudi Aramco, Kuwait Petroleum Corporation and Indian Oil.

'€œWe are expecting to have potential candidates shortlisted by mid-February. And by the end of February, or March, we will have our strategic partner,'€ Rachmad said.

Cooperating with strategic partners is seen as necessary as Pertamina cannot bear the investment on its own particularly because it is also working to improve the capacity of four existing refineries.

Apart from a direct assignment to Pertamina, the planned presidential decree will include other options to accelerate refinery development in the country, such as public-private partnerships, state budget-funded project and private development.

The regulation is being finalized and will be issued early next year, according to the Energy and Mineral Resources Ministry'€™s oil and gas director general IGN Wiratmaja Puja.

'€œWe will need four refineries in the next 10 years. One refinery will be developed under a direct assignment scheme by Pertamina and another under a government-private scheme in Bontang,'€ Wiratmaja said.