Azernews.Az

Indonesia's OSO Group plans to build a $4.8 billion oil refinery in a joint venture with the Azerbaijani state oil company SOCAR, a partnership it hopes to formalize in November, Reuters quoted a top OSO official as saying on Wednesday.

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, said.

According to Asril, both sides will invest in the construction of the oil refinery, however the most of funding will come from Azerbaijani side. OSO Group for its part will provide all the facilities, the permit and the land.

Asril said that a memorandum of understanding with SOCAR is expected to be signed 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.

SOCAR carries out oil trade in regions across the world under the brand of SOCAR Trading.

The company has made its office in Singapore fully responsible for the development of trade with crude oil in Asia, including increasing its market share at the expense of long-term contracts.