Foreign Investors to Build Refineries in Tuban, Balongan

Jakarta - Industry minister MS Hidayat has said that foreign investors will build oil refineries in Tuban, East Java, and in Balongan, West Java. "State-owned oil and gas firm Pertamina is still studying the feasibility of the two oil and gas refineries in Tuban and Balongan of Indramayu, West Java," the minister said here on Thursday. The Tuban refinery will be built by Saudi Aramco, while the Balongan refinery of Indramayu will be developed by Kuwait Petroleum Corporation (KPC). According to MS Hidayat, the values of the two refineries are US$10 billion each. Both refineries are also expected to produce oil byproducts. "They have commitment to distributing 300,000 barrels of crude per day to Pertamina. And what is important is that they will have petrochemical byproducts, so that it would invite other investors, which would create more employment," he noted. MS Hidayat explained that, until now, only three countries in the world produced crude oil - Iran, Saudi Arabia, and Kuwait. "We have tried to cooperate with Iran but failed due to non-business reasons. Therefore, the government is now trying to realize the plan with other countries," he said. The minister pointed out that incentives were needed to build a large refinery, because the investors' profit margins were not big. (*)