Explanation of ESDM Minister on Aramco’s Investment Plan in Indonesia

Minister of Energy and Mineral Resources Sudirman Said

Saudi Arabian Oil Company (Aramco) stated its interest to invest in Indonesia by constructing refineries, storages and direct distribution system in Indonesia as well. Cabinet Secretary Pramono Anung even mentioned that the company intended to invest US$ 10 billion to establish its business in Indonesia.

The Minister of Energy and Mineral Resources (ESDM), Sudirman Said who accompanied President Jokowi during his visit to three Middle East Countries, namely Saudi Arabia, United Arab Emirates (UAE), and Qatar, from Friday to Tuesday (11-15 September), explained further about Aramco’s plan to invest in Indonesia. The following is the excerpt of ESDM Minister’s interview with the press in Dubai, UAE on Monday (14/9):

Press (P): What issues are still being dicussed related to the investment on oil and gas?

ESDM Minister (M): There are some issues that have not been final yet, for example the (cooperation) scheme between Aramco and Pertamina. We expect that they will also make some investment beside maintaining the crude oil supply.

The Government of Saudi Arabia expected that Aramco can play role in downstream business, marketing and distribution. Pertamina has not fully agreed on it, while considering the regulation and direction, the Government provides big opportunity for downstream business investment. This is an important matter because the burden of maintaining national stock and building infrastructure can be shared amongst Pertamina and other investors.

Secondly, with great competition, all oil companies, Pertamina and private ones, will be encouraged to be more efficient. This thing will benefit the public.

So, they are still discussing this with Pertamina. I think Pertamina also knows that Aramco does not have any problem with it and they are ready to cooperate.

I joined the discussion yesterday between the President and the King of Arab Saudi, the Minister of Defence, the Crown Prince and the businessmen. Arab Saudi is indeed ready to invest in Indonesia.

P: What makes Aramco better than the others?

M: Aramco has a great amount of oil production, and they have been exporting to Indonesia. Besides that, we are going to join OPEC, therefore, we are going to cooperate with OPEC member countries, the oil-producing countries, although our cooperation will not always be in oil. Our cooperation with Aramco will be helpful when we have to interact with those countries.

We all know that these oil-producing countries have been trying to diverse their economies, from the oil-dominated economies to the varied ones. We can build a partnership in this area. We need their money and their oil, and we give them opportunity to invest in Indonesia.

P: How will we cooperate, are they going to build oil management blocks or just construct refinery or storage?

M: I think they are more interested in refinery and storage since most of them, moreover Saudi Arabia, have enough oil stock, and their oil is inexpensive because it is located on land. So, they are more interested in making Indonesia their market. This means they will send crude oil, construct refinery and distribute and sell the oil in our country.

We get the benefit from their investment money used to construct refinery and storage, so that Pertamina can utilize its budget for other things.  (SM/KMR/ES/Humas) (LW/YM-Naster/Sy)