Golkar wants incentives for Kuwait and Saudi companies

The Golkar Party has urged the government to accelerate the development of new oil refineries in Bontang, East Kalimantan and in Tuban, East Java.

Golkar Party legislator at the House of Representatives’ Commission VII overseeing energy  Bobby Rizaldi said the Finance Ministry had not yet issued a firm regulation regarding the incentives requested by Kuwait Petroleum and Saudi Aramco – state-owned oil and gas company Pertamina’s partners in the projects.

“The Finance Ministry should have responded to the request in June because the refineries have set a target to begin production in 2018 … further delays means more oil importations,” Bobby said in an official statement sent to The Jakarta Post on Friday.

Kuwait Petroleum is in charge of the refinery in Bontang while Saudi Aramco in Tuban. For both refineries, the required investment stands at around US$20 billion. Each of them will have the production capacity of 300,000 barrels per day (bpd) upon completion.

Both companies requested incentives from 15 percent of crude oil price mark ups, which is provided for the refineries based on the price set by Mean Platts Singapore (MOPS).

Development of new refineries is considered crucial for Indonesia as the last refinery that was built in the country was in 1994. This refinery is located in Balongan, west Java.

Pertamina currently owns six refineries that produce between 600,000 bpd and 700,000 bpd, far lower than the domestic need of 1.3 million bpd.

Sumber

http://www.thejakartapost.com/news/2013/09/27/golkar-wants-incentives-kuwait-and-saudi-companies.html