CNOOC enters biofuels business in Indonesia

Indonesia’s Sinar Mas Agro Resources and Technology signed a deal on January 9 with China National Offshore Oil Corporation (CNOOC) and Hong Kong Energy Holdings to develop biofuel projects worth US$5.5 billion in two remote provinces. The three companies intend to plant 1 million hectares of palm oil, sugar cane and cassava over the next eight years in Kalimantan and Papua, according to a Sinar Mas statement. The venture is CNOOC’s first foray into the overseas biofuels sector. If fully developed, it will dwarf Indonesia’s next largest biofuels project, a US$3 billion investment by Genting Biofuel Asia and Pembangkit Jawa Bali. “CNOOC is the largest investor, but because we have not yet formed a joint venture but only a signed a memorandum of agreement, we cannot yet say how much each partner will contribute,” said Gandhi Sulistiyanto, a Sinar Mas executive. “We plan to start next month with a 100,000-hectare plantation in West Kalimantan and a biodiesel factory in Dumai, Sumatra,” he said. (January 10, 2007)