An Indonesian oil company has denied responsibility for a major oil slick off the coast of Borneo, which appears to be spreading and contaminating new stretches of coastline and local fisheries.

At least four fishermen died in Balikpapan Bay on the weekend when part of the slick ignited. A fifth fisherman is missing.

The toxic slick is at least 4 kilometres long and fishermen say it has already killed at least one protected dugong that washed up on a local beach yesterday.

They also said it was wrecking their livelihood.

"It's a fire hazard and the smell is still there," local fisherman Maspele told the ABC.

Sorry, this video has expired Huge plumes of dark smoke emerge from oil slick fire off Borneo coast

"I'm standing on the coast nearby and the smell is so strong it's giving me a headache.

"The sea pollution is so bad and we've lost our livelihood."

Fishermen in the town of Balikpapan, in the Indonesian province of East Kalimantan, said they would hold a protest on Wednesday over the lack of responsibility shown by the Indonesian Government and the state-owned oil company Pertamina.

"We demand the stakeholders investigate and punish the culprit who's caused this ecological disaster and caused the loss of lives," Maspele said.

Fishermen said the oil slick had killed at least one dugong. ( Supplied: Jatam )

Pertamina said the spill had nothing to do with its nearby refinery or undersea pipeline.

The general manager of the nearby Pertamina Unit V Refinery said the company's divers had not been able to find any pipeline leaks.

"That's the reason why we're still running the refinery facility normally," manager Togar Manuring said.

The fishermen and environmentalists were sceptical about Pertamina's claim it was not responsible for the slick.

"We think there must be a leak from the Pertamina pipe because it's located very close to the oil — maybe 100 metres," Pradarma Rupang, from the local environmental group Jatam, said.

"There is no shipwreck, no collision, no sinking ship, no burned ship, nothing. Suddenly oil appears in the middle of the sea.

"People in the coastal area smelt oil at midnight on March 31, then there was a fire at 10:00am. There's an offshore refinery of Pertama nearby."