Investment Management of Pertamina Refinery Project

      Coordinating Ministry of Maritime and Pertamina Investment Management of Pertamina Refinery Project

The Maritime and Investment Coordinating Ministry will oversee all the refinery projects worked on by PT Pertamina (Persero). This follows the continued refurbishment of the Pertamina refinery project with its two partners, Saudi Aramco and Overseas Oil and Gas (OOG) Llc.

Deputy of Maritime Sovereignty and Energy of the Coordinating Ministry of Maritime Affairs and Investment Purbaya Yudhi Sadewa said the refinery project will continue. Regarding the withdrawal of two Pertamina partners from the national refinery project, this does not mean that the interest of international oil and gas companies to work on refinery projects is minimal.

"I am still optimistic that refinery investment will continue if it is well guarded," he said.

CPC Corporation - Taiwan

He recounted that he participated in overseeing one of the Pertamina refinery projects in Balongan, West Java Province, which is a refinery project that processes crude oil into petrochemical products. He continued to convince Taiwan Petroleum Corporation (CPC) of Taiwan to continue working with Pertamina. In fact, with the fall in oil prices, some companies actually withhold investment.

For information, at the end of last week, Pertamina and CPC signed the Head of Agreement / HoA for the development of the Integrated Petrochemical Industry Complex in Balongan. The petrochemical project is targeted to start operating in 2026. Purbaya said that the refinery project has many obstacles. One of them is the oil and gas mafia which complicates the construction of refineries.

oil and gas mafia

"I realize that investing in refineries is huge. We are dealing with oil and gas mafia. We are escorted. This can take place well, "he said.

Meanwhile, Energy Observer from Trisakti University Pri Agung Rakhmanto revealed, the investor's decision to invest in a project is very dependent on the return on investment from the project. If the return on investment offered falls within their criteria and there is a guarantee of certainty, investors will also work on the project.

"That's the principle. As long as there are no bright spots, investors will look for other investments, "he stressed.

He suggested, because Indonesia, which needed this investment, should be able to provide a guaranteed rate of return on investment for the refinery project. Moreover, the partnership between Pertamina and other oil and gas companies will facilitate the completion of the refinery project.

"If it can be a partnership, why should it be alone? If in business and investment, partnerships will not only strengthen but also for risk sharing, "explained Pri Agung.

Previously, in February, Pertamina said that it would not continue to work together on the development of the Bontang Refinery with OOG. Pertamina and OOG did not extend the framework agreement / FWA which formed the basis for the two companies to form a joint venture.

Pertamina also did not continue to cooperate with Saudi Aramco in the project of upgrading and upgrading the Cilacap Refinery. The reason is that the oil and gas company originating from Saudi Arabia is still focused on working on other projects, while Pertamina hopes to be able to work on the refinery project soon.

Still interesting

Purbaya added, oil and gas companies are still interested in working on refinery projects in Indonesia. One of them is that there is a company from China that plans to build a refinery. Unfortunately, Purbaya claimed not to know the details of the refinery project, including its capacity.

"There is a Chinese company asking for our approval to support the investment of US $ 6 billion-US $ 8 billion in the Batam, Riau Islands region," he said.

According to him, it is likely that the Chinese company will work on the refinery project itself, aka not cooperating with Pertamina. However, for the sale of refinery products, it is possible that the company will cooperate with Pertamina.

"But they say they can also sell international markets. Therefore the choice is in the Riau Islands Region, near international shipping lines, "said Purbaya.

In addition, Purbaya added that investment interest in the national refinery project was also conveyed by companies from the United Arab Emirates (UAE), namely the Abu Dhabi National Oil Company (ADNOC) and Mubadala Investment Company.

"So the enthusiasm and interest of investing in refineries is still very large," said Purbaya.

Referring to Pertamina's official statement, ADNOC agreed to learn more about the potential for developing the Integrated Petrochemical Refinery Complex in Balongan, West Java. Pertamina and Adnoc signed a memorandum of understanding at the end of last year.

the Tuban Refinery in East Java by Rosneft

While the Mubadala Investment Company is interested in becoming an investor in the Balikpapan Kalimantan Province Refinery Project worth the US $ 5.5 billion. In addition, Pertamina also continues to work on the Tuban Refinery in East Java with Rosneft Oil Company as its partner. 

    The two companies have formed joint ventures, namely PT Pertamina Rosneft Processing and Petrochemicals. Now the project has reached the stage of land acquisition and preparation of engineering design (general engineering design / DED).

Investor Daily, Page-10, Thursday, June 11, 2020.