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Indonesia group plans $4.8 bln refinery with Azeri oil firm

17 October 2012 15:52 (UTC +04:00)

Baku â€“ APA-Economics. Indonesia’s OSO Group plans to build a $4.8 billion oil refinery in a joint venture with the State Oil Company of the Azerbaijani Republic (SOCAR), a partnership it hopes to formalize in November, a top OSO official said on Wednesday, Reuters reported.

The target for the refinery is to process 600,000 bpd when it opens in 2017. It would be located on part of OSO’s concession in a free trade zone next to Batam island from where it could take advantage of busy east Asian shipping lanes.

"We are going to refine all the group oil from Azerbaijan. The purpose is to trade or sell the processed oil to Indonesia or any other Asia-Pacific country," Mariano Asril, CEO of the OSO Group, told Reuters.

"It would be funding from both (sides) but mostly from the Azerbaijan side but we will provide them with all the facilities, the permit, the land and everything," Asril said, adding that OSO hoped to sign a memorandum of understanding with SOCAR in November.

The refinery would be a departure for OSO, a non-listed holding company whose diversified portfolio includes mining, palm oil, hotels, airline ground services and fisheries. OSO trades as PT Citra Putra Mandiri, according to the group’s website.

SOCAR has joint ventures with other international partners but this would be its first project in Indonesia.