Pertamina built a national strategic project at the time of the Covid-19 pandemic, the Investment Coordinating Board (BKPM) said the development of land acquisition for the oil refinery and petrochemical complex in Tuban, East Java, had reached 92 percent of the total 841 hectares.
The progress of neglected investment settlement is good news during the Covid-19 pandemic in Indonesia. The investment project in Tuban is included in the list of Rp. 708 trillion in neglected investment recorded by BKPM. Since the collaboration between PT Pertamina (Persero) and Rosneft was formed in 2017, development projects have been delayed for a long time, one of which is due to land acquisition constraints.
The value of the abandoned project is very large, amounting to Rp 211.9 trillion. The Tuban oil refinery project is owned by PT Pertamina Rosneft Processing and Petrochemical, which is a joint venture between Pertamina at 55 percent and Rosneft PJSC (Russia) at 45 percent.
This project is part of the New Grass Root Refinery (NGRR) that Pertamina built to meet domestic energy needs and produce high-quality petrochemicals.
The construction of oil refineries has been included in priority infrastructure projects since President Jokowi's first cabinet in the form of new refineries (NGRR) and the development of existing refineries (refinery development master projects / RDMP). However, various obstacles confront, such as land acquisition, licensing, until the completion of the contract.
Joko Widodo
President of the Republic of Indonesia Joko Widodo in a limited meeting on April 18, 2019, even gave strict directions to facilitate investors in the petrochemical sector to be given tax holiday investment incentives.
This indicates the government's seriousness in realizing the dream of building its own oil refinery. BKPM Sectoral Promotion Director Imam Soejoedi said that BKPM responded to this matter very seriously. BKPM has taken steps to resolve the issue of land acquisition in Tuban District intensively since last year and the licenses that have hampered the project have been neglected.
There are still a few small homework related to several permits namely environmental permits and are currently in the process of accelerating cooperation with the Ministry of Environment and Forestry (KLHK).
"Completion of this project is the government's priority to build downstream industries in the country so that Indonesia can reduce the deficit in the import balance, dependence on oil imports, and can build national industry resilience," Imam said.
The Head of BKPM forms a special team within BKPM to accelerate problem-solving in Tuban. In early February 2020, the head of BKPM visited the project site to complete negotiations with the surrounding community. This was done because this project would have a direct positive impact, including requiring up to 20 thousand workers at the time of construction and 2,500 workers in the operational phase.
Pertamina's Director of Processing and Petrochemicals (MP2) Ignatius Tallulembang stated that the Tuban GRR is one of the priority projects to be completed immediately. Pertamina and Rosneft have even signed a Tuban Refinery design contract with selected contractors last October 2019.
At present, Basic Engineering Design (BED) and Front End Engineering Design (FEED) are ongoing. The construction of the Refinery Development Masterplan Program or Balikpapan RDMP also continues.
Fajriyah Usman
At present, the progress has reached 16.32 percent, up from the first quarter of 2020 recorded 15.02 percent. Pertamina Corporate Communication Vice President Fajriyah Usman stated that the progress of the Balikpapan RDMP is currently on track, even though in the implementation process it must implement strict health protocols.
"The RDMP and GRR megaprojects are national strategic projects that have been set to continue to be built during the Covid-19 pandemic and fluctuations in crude oil prices and the rupiah exchange rate against the dollar. This project is important to ensure that national energy security and independence can be realized immediately, "said Fajriyah.
Fajriyah added, the progress of Balikpapan RDMP as of May 17, 2020, included four jobs, namely engineering (6.05 percent), procurement (5.85 percent), construction (4.38 percent), and commissioning (0.03 percent) so overall reached 16.32 percent.
Republika, Page-5, Friday, May 29, 2020
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