Indonesian President Hunting for Iranian Energy
Wednesday, 12 March, 2008 | 14:46 WIB
TEMPO Interactive, Teheran: The Indonesian government has agreed to economy cooperation and investment with the Iranian government.
Through this opportunity, Indonesia is trying to get Iran to supply their energy sources, like crude oil or gas, to Indonesia.
This agreement is part of the important mission of Indonesian president, Susilo Bambang Yudhoyono, to Teheran, Iran, amid the soaring crude oil prices that have disturbed the world, including Indonesia.
The three-day visit has caught world attention because it is taking place one week after the resolution voting by the Security Council of the United Nations about the nuclear program in Iran.
Indonesia was the only country of the 15 members of the security council that abstained from voting.
As it was reported by Tempo reporter, Bambang Harymurti, President Susilo arrived at Teheran yesterday (11/3) morning.
After a formal state ceremonial welcome, the presidents of both countries had a meeting at the Iranian President's office.
During the meeting, President Yudhoyono talked about large projects that had been initiated by both countries.
First is a plan to build refinery in Banten with a capacity of 300,000 barrels per day with an investment value of US$6 billion.
This will be one of the largest refineries in Indonesia apart from the oil processing sites in Cilacap and Balikpapan.
The Iranian oil company, the National Iranian Oil Refinery and Distribution Company, has agreed to own 40% of the shares in the project that in its initial stage will produce 150,000 barrels per day.
The remaining 60% of the shares will be controlled by the state oil and gas company, Pertamina.
“We expect the refinery to be operational with in the next four years”, said Pertamina President Director of Pertamina, Ari Soemarno, in Teheran.
The Memorandum of Understanding (MOU) for this project was in fact signed during the OPEC (Organization of the Petroleum Exporting Countries) conference in Isfahan, Iran in 2004.
But further negotiations became protracted because there was no confirmation regarding the supply of crude oil.
Before the second phase of MOU is signed, a Pertamina team will visit Iran to discuss some of the agreement’s points, including a guarantee for oil supply.
There have been reports that Iran has agreed to supply 180,000 barrels of crude oil per day from reserves at the Soroush and Nowrouz oil fields.
Another large joint project is a fertilizer factory worth 470 million Euros in the Economic Energy Region of Assaluyeh, Iran.
Ownership of the factory will be held together PT. Pupuk Pusri and Hengam Petrochemical Company, with a 50% share each.
“Iran has promised to supply gas at a cost of one dollar per MMBtu”, said Pusri President Director Dadang Heru Kodri.
It is hoped that this factory will be operational by 2012.
In addition to these projects, several Indonesian companies desire Iranian energy.
The government expects Iran to supply 150,000 of crude oil per day to Indonesia at a competitive price.