Pertamina Wants Stake in Oil & Gas Block in Tuban Refinery Investor"s
Pertamina wants its partner in the Tuban Refinery project to widen its focus and offer Pertamina the opportunity to manage oil and gas blocks in the partner’s home country.
The state oil and gas giant intends to include a clause to this effect in the cooperation contract to be signed by the investor. The company’s Vice President of Corporate Communications Wianda Pusponegoro said that Pertamina is currently preparing the terms of reference for the contract with the investor in the Tuban refinery.
A key point of the contract will be business integration between Pertamina and its partner. "We expect (the partnership) to not be limited to the refinery. But (to extend) to opportunities in the upstream oil and gas sector," she told Katadata on Monday (9/5). (Read: Land Acquisition for Tuban refinery Already 78 Percent)
Pertamina has yet to decide on its would-be partner in Tuban refinery. Five prospective investors remain: Rosneft from Russia, Saudi Aramco from Saudi Arabia, Kuwait Petroleum Inc. from Kuwait, Sinopec from China, and a consortium of Thai Oil Thailand and PTT GC Thailand.
Despite the delay in the decision on the investor in the Tuban refinery, Wianda was not concerned about any delay in the construction of the refinery. "We are more focused on preparing a good contract that maximises the legal and commercial aspects. We don’t want to rush if it’s not finalised, not finished," she said. (Read: Investors Promised Big Profits from Tuban refinery)
Downstream Director at the Ministry of Energy and Mineral Resources, Setyo Rini Tri Hutami, said that the delay in the announcement of the investor of Tuban refinery was no problem. She said that Pertamina could catch up. "If it is slow in one aspect, we’ll ask Pertamina to speed up in other stages, for example, in the design study," said Rini to Katadata, Monday (9/5).
If all goes according to plan, construction of the Tuban refinery will take at least four years and will be completed by 2021. The Tuban refinery has the capacity to produce 300 thousand barrels per day. Upon completion, the refinery will be integrated with the construction of the Trans-Pacific Petrochemical Indotama (TPPI) refinery.
Top of the short list of prospective investors is Russian oil company, Rosneft. The company paid a visit to Indonesia and met the Minister of Energy and Mineral Resources Sudirman Said and Minister for State-owned Enterprises (SOEs) Rini Soemarno some time ago. (Read: Rosneft Leading Prospective Investor for Tuban Refinery)
Rosneft has also offered cooperation in the upstream oil and gas sector. The company has experience in managing refineries. In addition, its oil production is huge and could supply the input for the refinery. Rosneft could supply as much as 5.2 million barrels per day to the Tuban refinery.
Construction of the refinery will cost around US$ 12 billion. Pertamina’s partner will have a 45 percent stake while Pertamina holds the remaining 55 percent. Pertamina will fund 40 percent of the cost, and the remaining 60 percent will come from external funding.
