BPH Migas Says Indonesia Needs More Oil Refineries

By webadmin on 07:40 pm Jul 18, 2012
Category Archive

Indonesia’s downstream oil and gas regulator BPH Migas says the country needs at least three oil refineries in order to bolster the nation’s fuel stockpile and ease pressure on the national budget.

BPH Migas said it estimated that one refinery with a capacity to process 250,000 barrels of crude oil per day will cost between $6 billion and $8 billion.

The refineries will enable the country to cut fuel subsidy spending because it will no longer need to import fuel, BPH Migas officla Saryono Hadiwidjoyo said on Monday.

At present, there are few oil refineries in Indonesia. State oil and gas company Pertamina has six, spread across Tuban in East Java; Cilacap in Central Java; Dumai in Riau; and Balikpapan in East Kalimantan.

They primarily produce gasoline but not enough to satisfy domestic demand.

These refineries are capable of processing 1.157 million barrels of crude oil per day into 704,000 bpd of gasoline.

The country’s gasoline demand, Saryono said, stood at 1.16 million bpd. Pertamina, therefore, has to import gasoline to meet the country’s needs.

“If it costs $100 per barrel, count how much the state has to spend. Therefore, we should realize these new refineries, so that spending like this can be pushed down,” Saryono said.

BPH Migas has called on all stakeholders in the oil and gas sector to generate ideas to enable the construction of the three proposed refineries.

Indonesia’s current fuel inventory is enough for between 21 and 23 days of consumption, Saryono said, compared to the United States, which has stockpile for 90 days, Japan for up to 200 days and European countries averaging 90 days.

Large foreign oil and gas companies such as Saudi Aramco and Kuwait Petroleum Corporation, have expressed interest to build refineries in Indonesia, citing investment need of $8 billion. They are planning to cooperate with Pertamina.


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