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Pertamina bids for majority stake in Southeast Asian refinery

[JAKARTA] Pertamina is bidding for a majority stake in a refinery in Southeast Asia, the firm's refineries director said on Monday, as the state energy company moves to increase domestic fuel supply and reduce costs.

The refinery has a processing capacity of 220,000 barrels of crude per day and can process a mix of sweet and sour crude, Pertamina Refineries Director Rachmad Hardadi told reporters, adding that the firm hopes to acquire a 51 per cent stake. "Pertamina would manage it but they would operate it. (The winner) will be announced in two days time," Mr Hardadi said, noting that Pertamina would have the right to 51 per cent of the refinery's output, all of which would be exported to Indonesia.

Under the proposal, Pertamina would begin receiving fuel from the refinery in early 2016.

Crude feedstock would be sourced via Pertamina International Exploration Production (PIEP), he said. "A certain portion of the oil could be from the Middle East." No further information was immediately available on the country or site of the proposed refinery investment, but Pertamina said on Sunday it planned to open a new office for Pertamina International Exploration-Production in Kuala Lumpur.

Pertamina acquired six Murphy Oil oil and gas blocks in Malaysia in November 2013.

The firm is also looking at the option of acquiring a refinery in Australia. "We are calculating whether they will operate it but Pertamina manages it, or if we acquire it (and) send Pertamina people there to operate it." Over the longer term Pertamina remains focused on developing domestic refinery capacity both through new refinery developments and upgrading existing facilities, Mr Hardadi said.

The firm targets to build three new refineries and upgrade four existing facilities domestically, increasing domestic capacity to 2.3 million barrels of crude per day from 1 million barrels at present. By 2024 Pertamina hopes to increase gasoline and diesel production to 1.795 million barrels per day from 537,000 barrels per day at present.