Oman is planning a $7bn downstream project in Indonesia that will see the Sultanate build oil storage facilities, a petrochemical plant and a refinery, Reuters reports.
The statement came from Indonesia's Energy Minister Sudirman Said who also said the refinery would be built in Indonesia's Riau province, Sumatra.
The oil products will be purchased by state-owned Pertamina, which plans to raise its refining capacity from the current 1mn barrels per day (bpd) to 2.3mn bpd through upgrades and additional plants.
"We are now in the process of issuing the permits," Said told reporters following a meeting between Oman's investment minister and Indonesia's vice president in Jakarta, adding that groundbreaking was expected next year.
Reuters reported that the minister would announce more details about the agreement next week.
Oman has also agreed to supply Indonesia with much needed crude oil to help boost energy demand at home. The South Asian country has suffered from severe fuel shortages as a result of lack of investment in its refining sector since the construction of its last refinery was completed in 1994.