Oil and Energy

Indonesia's President Susilo Bambang Yudhoyono will sign a memorandum of understanding with the company, also known as Sinopec, when he visits China this week, Yusgiantoro told reporters yesterday in Jakarta.

The refinery in Tuban in east Java will have the capacity to process as much as 200,000 barrels of oil a day, Widya Purnama, president director of state oil company PT Pertamina, said today in Jakarta. The refinery will process crude oil pumped from fields operated by Exxon Mobil Corp. and Santos Ltd., Yudhoyono said on July 11.

Indonesia's proposed refinery plan follows the resolution of a four-year dispute between Exxon Mobil Corp. and the government over sharing revenue from Cepu, the Southeast Asian nation's largest untapped oil field. Cepu is estimated to contain 500 million barrels of oil and would add about 18 percent to Indonesia's output at a time when global crude prices have risen to records.

Sinopec is increasing exploration and buying overseas assets to cut the nation's reliance on fuel imports. China, the largest energy user after the U.S., may use 9.7 percent more crude oil, chemicals and fuel this year, China Petroleum & Chemical Corp., a unit of Sinopec, said in April.

Indonesia has failed to proceed with previous plans to build another refinery. In 2003, PT Pertamina said it was in talks with Mitsui & Co. and Mitsubishi Corp. to build a $1.6 billion refinery in Tuban. Last year, Pertamina invited Malaysia's Petroliam Nasional Bhd., or Petronas, to invest in the project.

Indonesia, the second-smallest member of the Organization of Petroleum Exporting Countries by production, imports about one- fifth of its oil products each year because its 1.08 million barrels a day of refining capacity isn't enough to meet domestic demand.

The country burns about 1.2 million barrels of oil products a day. Qatar has the lowest production among OPEC's 11 members.

Shayne Heffernan in will be representing Suncrest Energy at the meetings in Jakarta, Suncrest Energy and Shayne Heffernan will be the first Foriegn Oil company to enter Indonesias troubled areas for sometime and Mr Heffernan is confident of great results.