Oil and gas affairs director general of the Energy and Mineral Resources ministry, Evita Legowo said here on Wednesday that the government hoped KPC would not resign from constructing the crude oil refinery with a production capacity of 300,000 barrels per day.
"Although the finance ministry has rejected the import duty exemption, I will ask the state-run oil and gas company, PT Pertamina to discuss the matter with Kuwait," Evita said.
The finance ministry`s Fiscal Policy agency opined that KPC`s incentive request is excessive and KPC actually has received many benefits such as the tax holiday, among others.
Pertamina and KPC had signed a Memorandum of Understanding (MoU) over the feasibility study of the Balongan crude oil refinery on August 11, 2011.
In addition, Kuwait had also agreed to supply crude oil to the Balongan oil refinery.
Nevertheless, Pertamina deserves to seek another partner to build the Balongan crude oil refinery, Evita said, adding that the government has carried out negotiation with another country regarding the Balongan crude oil refinery.
"However, I cannot announce which country has been contacted," she said.
According to her, the government itself can construct the crude oil refinery if it has enough funds.
The government hoped that an agreement to build the Balongan crude oil refinery can be reached in 2012.
Meanwhile, PT Pertamina`s spokesman, Mochamad Harun confirmed that his company continues to cooperate with Kuwait.
"We hope that the Balongan crude oil refinery will be operational in 2017," Harun noted.
Apart from the Balongan crude oil refinery, Pertamina also signed an MoU on Tuban oil refinery in East Java province with Saudi Aramco`s subsidiary, the Saudi Aramco Asia Company Limited (SAAC).
Tuban oil refinery is expected to produce 300,000 barrels of crude oil per day, of which 250,000 barrels constitute a long-term contract with SAAC, and the rest (50,000 barrels per day) cover a contract with another oil producer, Harun said.
Currently Pertamina has six crude oil refineries that process 1,031 million barrels of crude oil per day.(*)
Editor: Heru Purwanto
Copyright © ANTARA 2012
