Indonesia’s Pertamina, Russia’s Rosneft ink $13b Tuban Refinery framework agreement

27 May 2016
Indonesia state-owned energy provider PT Pertamina and Russia’s oil & gas producer OJSC Rosneft Oil Company signed the framework agreement on greenfield Tuban Refinery project in East Java. The project, with a refining capacity of 300,000 bpd –45 per cent produce gasoline, 35 per cent diesel and 20 per cent feed for petrochemical– is estimated to require an investment of around $13 billion.

The signing of agreement between vice president of Rosneft Didier Casimiro and Pertamina’s director Rachmad Herdadi was witnessed by Russia’s Ambassador Michael Galuzin, Coordinating Minister for Economic Affairs Darmin Nasution, State Own Enterprises Minister Rini Soemarno and Directorate General for Oil & Gas for Energy and Mineral Resources I Gusti Nyoman Wiraatmadja Puja.

Nasution in his speech said, larger investments done by the likes of Rosneft and Pertamina were very important for Indonesia and the the project had possibility to develop both upstream to downstream industry. CEO of Pertamina Dwi Sutjipto said, the company will own at least 55 per cent at the joint venture company that has set up to build the refinery while Rosneft will own the the remaining stake.

“There is also potential for Pertamina to step in as a shareholder in Rosneft’s upstream projects in Russia.,” said Casimiro, adding that Rosneft was keen on creation of a regional energy hub in Indonesia. Pertamina expects to supply crude oil to the refinery and could produce 35,000 bpd from Russia’s block. The company is in the process of seeking the block in Russian to fulfill the requirement, added Sutjipto.