Pertamina set to sign $2b deal with Iran

Ika Krismantari , The Jakarta Post , Jakarta | Thu, 03/06/2008 1:21 AM

State oil and gas company PT Pertamina will sign an agreement with an Iranian firm to build an oil refinery in Banten with a capacity of 200,000 barrels of oil per day.

If the joint venture materializes, the US$2 billion facility will be the second-largest oil refinery in the country.

President director Ari Soemarno said Wednesday a team from the company's processing and refinery division was on its way to Tehran to meet with representatives of Iran's state oil company, National Iran Oil Company.

Ari was speaking to reporters after the inauguration of the company's new directors.

The team will discuss a number of points before the signing, including the security of the crude oil supply.

The two companies had long planned the project but negotiations stalled over a disagreement on the refinery's oil supply.

Having initially promised to be able to supply up to 300,000 barrels of oil, the Middle East country said later it would only be able to supply 150,000 barrels, putting the project in jeopardy.

However, recently Pertamina struck a deal with Libya for another supply of 50,000 barrels of oil, reviving negotiations.

"We think a refinery with a 150,000-barrel capacity is not economically feasible. But it definitely is with 200,000 barrels now that Libya can help," Ari said.

Also on Wednesday, Pertamina replaced three of its directors.

Two of the three are women, Karen Agustiawan and Rukmi Hadi Hartini, replacing Sukusen Soemarinda and Suroso Atmomartoyo for directors of upstream and processing, respectively.

Waluyo, a former member of the Corruption Eradication Commission (KPK), became the director for general affairs and human resources, replacing Sumarsono.

State Minister for State Enterprises Sofyan A. Djalil said the next target for a shake-up in state firms would be power company PT PLN as the tenure of a number of directors, including president director Eddie Widiono and finance director Parno Isworo, are nearing their ends.