JAKARTA (rambuenergy.com) – Indonesia’s state owned energy company PT Pertamina and Russia’s giant oil and gas company Rosneft is now moving closer to realize a plan to develop major oil refinery in Tuban, East Java with estimated investment of US$11-12 billion.
The news came after Chairman of the Management Board of Rosneft Igor Sechin met with President Joko Widodo in Sochi, Russia on Friday. The President is visiting Russia to attend the ASEAN-Russia summit. At the meeting, the President was accompanied by State Owned Enterprise Minister Rini Soemarno and Pertamina President Director Dwi Soetjipto.
Vice President Corporate Communication of Pertamina Wianda Pusponegoro said in a statement that the planned cooperation has been finalized by both parties during Pertamina’s visit to Russia.
She said both parties have agreed to sign framework agreement on the matter, scheduled to be signed next week in Jakarta.
The cooperation between the two parties encompasses the development of new oil refinery. Pertamina will hold 55 percent in the venture, and the remaining 45 percent will be held by Rosneft.
On Thursday, the SOE Minister Rini Soemarno, Dwi Soetjipto and Pertamina Director for Processing Rahmad Hardadi visited Tuapse oil refinery owned by Rosneft. The visit was part of the efforts to cement cooperation between the two parties in oil and gas sector.
Tuapse Refinery has the capacity to produce 240,000 barrels per day (bpd) of oil with Euro 4 and Euro 5 standards. The delegation also visited seabed oil terminal facilities in Tuapse which has the transshipment capacity of around 17 million tons of fuel per year.
The cooperation between Pertamina and Rosneft began after both parties signed a memorandum of understanding (MoU) in Lenexpo St. Petersburg, Russia in June 2015.
Then in late April, Chairman of the Rosneft Management Board Igor Sechin visited Indonesia and met with the Energy and Mineral Resources Minister Sudirman Said, State-Owned Enterprises Minister Rini Soemarno and oil and gas company Pertamina President Director Dwi Soetjipto.
The two sides – Pertamina and Rosneft — discussed the prospects for joint projects in the field of crude and product supplies, logistics and infrastructure, Rosneft participation in oil refining in Indonesia, and the potential for Pertamina to step in as a shareholder in Rosneft’s upstream projects in Russia.
Igor Sechin noted that Rosneft appreciates the prospects of cooperation with Pertamina, which will provide an additional channel for Rosneft to supply its high-margin products to one of the fastest growing economies in the region (4.79% GDP growth in 2015).
Indonesia currently a net importer of fuels and petrochemicals. Petroleum products are supplied to Indonesia primarily from South Korea and Singapore. (*)