Saudi Aramco may cut stake in Indonesia refinery project

Saudi Arabian Oil Co. (Saudi Aramco) may cut its stake in a proposed $5.5 billion joint refinery project to 30 percent from 45 percent, Indonesia’s interim energy minister Luhut Pandjaitan told reporters on Wednesday.

The state-owned oil giant has requested to reduce its position in the project in order to upgrade a refinery in Cilacap, located in Central Java, Pandjaitan said.

Indonesia’s state-owned oil firm Pertamina, which is jointly developing the refinery, would likely absorb the difference, he added.

"Aramco's progress has been rather slow. We want to chase this, not just talk. We want something concrete now," Pandjaitan was quoted by Reuters as saying.

Saudi Aramco officials declined to comment, while a spokeswoman for Pertamina was not immediately available to comment on the matter, the news agency said.

Indonesia hopes to formalize a joint venture and the partnership between Aramco and Pertamina during King Salman’s visit to the Asian country in October.

In May, Pertamina signed a memorandum of understanding (MoU) with Saudi Aramco to upgrade capacity at the Cilacap facility. The project, which will see the refiner’s crude processing capacity boosted to 370,000 bpd, is expected to be completed by the end of 2022.