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Jakarta Post

Oman set to develop new oil refinery complex in Riau

  • Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Fri, May 29, 2015   /  09:20 am

Oman has expressed its interest in taking part in the development of the country'€™s downstream oil and gas industry.

Energy and Mineral Resources Minister Sudirman Said revealed on Thursday that Oman was interested in building a new oil refinery in Riau.

Oman would supply the required crude oil for the refinery, develop storage facilities, and could later expand into petrochemicals, the minister said. '€œIt has prepared US$7 billion in total and is now in the process of obtaining a permit. Ground-breaking of the refinery project is expected to be as early as next year,'€ Sudirman said following his meeting with a senior Omani official.

Figures from Oman'€™s Ministry of Oil and Gas shows that it currently produces an average of 960,300 barrels of crude oil and condensate daily.

The Middle-Eastern country, whose population is only around 3.6 million, exported a daily average of 948,493 barrels of crude oil, with China as the main buyer.

In April, Oman'€™s exports to China accounted for almost 83 percent of its total export volume. However, according to the report, imports to China declined by 5 percent in April compared to March.

Indonesia, which is currently seeking to re-enter the Organization of Petroleum Exporting Countries (OPEC) as an observer nation, is trying to secure more crude oil supplies to feed its ballooning energy consumption.

Its national oil output currently amounts to approximately 800,000 barrels per day. However, the country'€™s roughly 250-million citizens need as much as 1.6 million barrels per day. In consequence, Indonesia is now an increasingly major importer of crude oil and petroleum products.

'€œWe are assessing all countries that have oil supply because a wider range of supply alternatives is better for us. We are a big buyer so it is normal to ask for good terms. Our intention is to have a direct deal so that we don'€™t have to go through middlemen,'€ Sudirman said.

In previous years, the country had a number of discussions with potential oil producing countries. It has also invited interested countries and firms to invest in refinery development. However, the attempts have often fallen through.

To date, the country has six oil refineries operated by state owned firm Pertamina. However, the refineries are old and can no longer operate at full capacity, leading to rising imports of petroleum products.

Pertamina is currently working to upgrade four of the six refineries so that they will be able to produce more and better products.

The Energy and Mineral Resources Ministry'€™s director general for oil and gas, IGN Wiratmaja Puja, said earlier that the government was working on new public-private-partnerships for the development of four new refineries in the country. The refinery development is also expected to improve Indonesia'€™s energy security.

Apart from Oman, the Energy and Mineral Resources Ministry has also noted interest from Iran for the development of a hydropower plant in Indonesia.

'€œWe are not only seeking crude supply from Iran but we are also aware that Iran is experienced in hydropower plant development. This is in line with the Indonesian government'€™s plan to encourage the development of renewable energy,'€ the ministry'€™s spokesman, Dadan Kusdiana, said, explaining the recent visit by officials to Iran.

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