Almost Complete Design, Construction Phase Next Year

Tuban Grass Root Refinery Project

    The oil and gas industry is increasing downstream development. Pertamina has also increased the progress of the Tuban Grass Root Refinery (GRR) refinery project.

Rosneft

    Director of Development of PT Pertamina Rosneft Processing and Petrochemical (PRPP) Eriyadi stated that his party had entered the finalization of the design details of the project.

    The stage called Front End Engineering Design (FEED) reached 90.99 percent at the end of last month. This figure is higher than the first quarter target, which is 87.84 percent. With this progress, he estimates that the project design can be completed in May.

"This design stage is very important. The completion of this stage is equivalent to 49 percent of the oil refinery construction process," he said.

Tecnicas Reunidas SA (TRSA)

    The FEED activity has been running since March 16. PRPP collaborated with Tecnicas Reunidas SA (TRSA), an engineering company from Spain, as a design contractor. In the FEED stage, TRSA develops the design of open-art units, off-site facilities, and utilities, as well as overall design oversight and integration.

    In parallel, it also cooperates with other partners. Among them, are PT. Perusahaan Listrik Negara (PLN) for the supply of electricity at the construction stage and Kris Energi for the supply of gas. Supporting infrastructure such as the Demak-Tuban toll road, reactivation of the Babat-Tuban city railway, as well receive support from other stakeholders.

"We have received other tax incentives to support the Tuban GRR refinery," he said.

    The land clearing process has also entered stage IV. In that phase, the target is an area of ​​221.17 hectares. The completion of stage IV land clearing as of March 31 has reached 49.01 percent. This figure is faster than the target, which is 45.3 percent.

    Eriyadi added, that after the FEED is completed, the company will enter the final investment decision (FID) process at the shareholder level.

"Furthermore, the engineering, engineering, procurement, construction/EPC phases are expected to start in the third quarter of 2023," he said.

Jawa Pos, Page-3, Wednesday, April 27, 2022

#Rosneft, #Tecnicas Reunidas SA (TRSA)

After Selling the Land, and Now I Haven't Income

 

Surya Daily

    After Selling the Land, and Now I Haven't Income - The story of a billionaire village resident in Jenu District, Tuban, East Java, Indonesia has not yet been completed. After receiving compensation from the sale of land for the Pertamina Grass Root Refinery (GRR) oil refinery project in a local sub-district, now the bad news is coming.

Rosneft Oil Company

    This was discovered during a demonstration by residents of six villages around the joint venture company Pertamina and Rosneft from Russia, Monday (24 January). The six villages are Wadung Village, Mentoso, Rawasan, Sumurgeneng, Beji and Kaliuntu, Jenu District.

    An old man, named Musanam, a resident of Wadung Village, admitted that he regretted selling his land and house to PT Pertamina Rosneft Processing and Petrokimia (PT PRPP) a year ago. Now the 60-year-old grandfather no longer has a steady income like every harvest season. To meet the needs of daily life, he was forced to sell his cattle.

"I have sold three cows to eat and now there are three cows left," he said on the sidelines of the demonstration.

    Another resident named Mugi, aged 60 years, is another billionaire village resident. After selling his 2.4-hectare land to the state-owned company, he is now having a hard time getting an income every harvest. If you usually can get Rp 40 million at harvest, now you no longer get that result.

"In the past, I planted corn and chilies, each time I harvested Rp 40 million. Now I no longer have income, after selling the land," he said.

    He also said that his land was sold for Rp. 2.5 billion and then the money was used for daily needs, the rest he saved. Mugi remembers that Pertamina used to often visit him when he was in the fields to sell the land. All persuasion was offered, including a job offer for his son. But until now, the offer has never been realized.

"In the past, I was visited by Pertamina to want to sell the land, they promised to give jobs to my children but nothing has been realized until now," he said.

    Previously, an alliance of residents of six villages was demonstrated at the Pertamina GRR oil refinery. Around 100 people involved the Youth Association of six villages in the company's ring area, regarding PT PRPP which was considered uncooperative. The field coordinator for the demonstration, Suwarno, said that there were five demands from the community. 

    First, prioritizing affected residents regarding security recruitment. Second, all vendors at Pertamina in the recruitment of workers must coordinate with the village. Third, in accordance with the promise and development goals, Pertamina must provide opportunities and education for affected residents.

    Fourth, if Pertamina is able to employ pensioners who in fact are elderly, why are affected people who should be empowered even made it difficult to work under the pretext of age restrictions. Fifth, remove vendors and individuals within the Pertamina project scope who are not pro to the affected people.

"This action is the result of Pertamina's lack of transparency in the villages around the company. We urge the demands to be realized," he told reporters.

    Company representatives who met the protesters said they would convey the residents' demands to the leadership.

"We will convey it to the leadership," said Solikin, who is the company's representative at the location.

    Meanwhile, PT PRPP Yuli Wahyu Witranta's Corporate Affairs, when confirmed regarding the actions of residents around the company, did not provide a detailed response. From the confirmation efforts made, he replied that there would be a release. But until late at night when it was reconfirmed, Yuli replied that she couldn't approval from the International Pertamina Refinery (KPI).

Surya, Page-1, Tuesday, Jan 25, 2022

#Rosneft, #PT PRPP, #PT Pertamina Rosneft Processing and Petrokimia (PT PRPP)

Pertamina Accelerates Fuel and Petrochemical Refinery Projects

PT Pertamina (Persero) will accelerate the work on ongoing fuel oil (BBM) and petrochemical refinery projects. This is after President Joko Widodo complained about the slow progress of investment from the company's refinery project.

Pertamina Vice President Corporate Communication Fajriyah Usman said the company appreciates the President's attention and direction on the implementation of Pertamina projects, one of which is the refinery project. His party will follow up the direction of the Head of State.

"We will immediately follow up by accelerating the completion of the project," said Fajriyah Usman.

    The two projects that the President complained about were the development of the PT Trans-Pacific Petrochemical Indotama (TPPI) petrochemical refinery and the construction of an integrated petrochemical fuel refinery with Rosneft Oil Company. Regarding the TPPI refinery, Fajriyah explained, there are two major scopes of work that are carried out by his party.

Fajriyah Usman

    First, the TPPI aromatic revamping project is divided into two phases. The first phase includes the construction of five tank units to maximize paraxylene production with a total capacity of 600 thousand tons with a completion target of December 2021.

    The second phase is an increase in processing unit capacity from 600-kilo tonnes per year (kilo tonnes per annum/KTA) to 780 KTA which is scheduled to be completed in mid-2023.

    The second project is the development of olefin petrochemicals. TPPI is holding an auction for this project which includes basic engineering design (BED) and front-end engineering design (FEED). The project, which is targeted for completion in 2025, will produce polypropylene and polyethylene.

"The current investment absorption for revamping projects is around US$ 238 million, and for olefin projects, it is around US$ 3.9 billion," said Fajriyah.

    According to him, the Tuban Refinery Project is ongoing and scheduled for completion in 2027. Referring to Pertamina's data, the refinery project is planned to have a crude oil processing capacity of 300 thousand barrels per day (BPD). The refinery, which is integrated with the petrochemical complex, will produce fuel of 230 thousand BPD, as well as petrochemical and aromatic products reaching 4.1 million tons per year.

"The Tuban refinery is currently in the stage of making FEED with an actual progress of 49.16%," said Fajriyah.

    In addition to the two projects, the company also continues to work on repair and capacity building projects for other existing refinery projects, namely the Balikpapan and Balongan refineries. According to Fajriya, the Balikpapan Refinery Project is currently in the execution stage of the engineering, procurement, and construction (EPC) package with the progress of 43.9%. This project is targeted for completion in 2024.

"Then the Balongan Refinery is currently in the process of executing the EPC with an actual progress of 39.09%," said Fajriyah.

    The Balongan Refinery Phase I project is targeted for completion in April 2022. Previously, President Joko Widodo said, Rosneft as Pertamina's partner in working on the Tuban Refinery Project wants to be able to realize its investment as soon as possible. But in fact, the realization of the investment was only Rp. 5.8 trillion from the planned Rp. 168 trillion. In fact, if limited public infrastructure such as access to trains and toll roads becomes an obstacle, the government is ready to build it.

    The same thing he said also happened in the TPPI Refinery Project. The progress of the project with an investment value of up to US$ 3.8 billion is fairly slow even though it has been running for quite a while. In fact, the auction of this project has been repeated twice. Meanwhile, on the other hand, the completion of this project will reduce dependence on imports of petrochemical products and improve the national trade balance. 

“Imports will not be much if we can produce ourselves. We have a raw material industry but we import instead, that's what I'm sad about. Because there will be a lot of things that will be lost if these goods are imported, especially those related to petrochemicals, there will be a lot of them," said the President.

    In fact, if the project is executed quickly, Pertamina will also benefit. The President said that even though the investment decision is in the hands of the company, it must still be in line with the country's grand strategy. Therefore, the company is expected to be able to realize the investment plan that has been agreed to according to the schedule, aka not keep going backward. Moreover, the government has supported the acceleration of this investment by issuing the Job Creation Act.

Investor Daily, Page-9, Thursday, Nov 25, 2021

Land Acquisition Completed, Pertamina Continues the Tuban Refinery

 

    PT Pertamina (Persero) through Subholding Refining and Petrochemical, PT Kilang Pertamina Internasional (KPI), is continuing to prepare land for the Tuban Refinery Project, East Java. This step follows the completion of land acquisition belonging to residents who are sure to comply with applicable regulations. KPI Corporate Secretary Ifki Sukarya said the land acquisition for the Tuban Refinery Project has been completed. Currently, his party is continuing to work on the Tuban Refinery Project which is now in the early work stage.

"The clearing of the land is still around 328 hectares and the restoration of abrasion (restoration) covering an area of ​​20 hectares has been completed," said Ifki.

    Ifki explained the majority of affected residents had received reimbursement of funds from Pertamina for land acquisition for the Tuban Refinery Project. The land that has been acquired has been reached 99% of the target area of ​​377 hectares of residents' land. This procurement has gone through all the mechanisms stipulated by Law Number 2 of 2012 concerning Land Acquisition for Development for Public Interest.

    The law has regulated the procedures for land acquisition for refinery construction, namely planning, preparing, implementing, then releasing agency land. In the preparation stage, based on the results of the inventory and identification of land tenure, Pertamina has followed the procedures for assessing compensation in accordance with the provisions by appointing a Public Appraisal Service Office (KJPP) which is then determined through the local National Land Agency.

"KJPP is the one that assesses the land to be taken over," said Ifki.

    Ifki added, Pertamina could not intervene in the land appraisal process carried out by KJPP and other parties. Pertamina also has the principle that this land acquisition process does not harm the residents whose land is affected. In fact, Pertamina also provides education to residents so that they can manage the money from land replacement as well as possible.

"On average, residents own a large area of ​​land. The bigger the land area, the bigger the replacement money will be automatically received, ”he explained.

    Pertamina had stated that the land requirement for the refinery project and petrochemical facilities in Tuban reached around 800 hectares, where part of the land belongs to the community and partly under the Ministry of Environment and Forestry (KLHK). In May last year, the company completed the land acquisition belonging to the Ministry of Environment and Forestry. The Tuban Refinery Project is one of the National Strategic Projects mandated by the Government to Pertamina.

    With the existence of a refinery in Tuban, future fuel needs can be met from domestic refineries, thereby reducing imports. This project is expected to increase the oil processing capacity by 300 thousand barrels per day (BPD) and will produce Euro V standard fuel in the form of gasoline (gasoline) 80 thousand bpd, diesel oil  100 thousand BPD, and Avtur 30 thousand BPD. The Tuban refinery is integrated with a petrochemical refinery with a production capacity of 3,750 kilotons per year.

Rosneft 

    The Tuban Refinery project was carried out by PT Pertamina Rosneft Processing and Petrochemicals (PRPP) which is a joint venture formed by Pertamina and Rosneft Oil Company since October 2016. This joint venture company will work on and manage the Tubang Refinery with 55% share ownership of Pertamina and Rosneft 45 %. The construction of the refinery will also absorb 35% of the domestic component level (TKDN), 20 thousand workers during construction, and 2,500 workers during operation. In addition, in the early stages of development, Pertamina absorbed 271 local Tuban workers.

Investor Daily, Page-10, Thursday, Feb 19, 2021

The fate of the tuna block is unclear

The news about the departure of oil and gas contractors continues to emerge. It is a partner of Premier Oil Tuna BV in the Tuna Block, namely Vietnam Oil and Gas Group (Petrovietnam), which is reportedly out. In exchange, a Russian company is exploring the block.

Petrovietnam

Acting Head of Program and Communication Division of SKK Migas, Susana Kurniasih, revealed that his party is still waiting for the assurance of Premier Oil, especially regarding the planned drilling agenda for this year.

Premier Oil

"Premier Oil already has a proposal for drilling two wells in 2020, but Premier said he would look for a partner before drilling," said Susana Kurniasih.

the Tuna Block by Premier Oil

The continuation of the Tuna Block depends on the seriousness of Premier Oil to complete its commitments. Susana explained that the exploration period for cooperation contract contractors (KKKS) is given for six years. An extension of the exploration period can be granted for a maximum of three years. The Tuna Working Area (WK) has received an extension period twice since it was first signed on March 21, 2007.

"The government has given two extension periods of exploration time and now this is the last year of the second extension," Susana explained.

Deputy Head of SKK Migas, Fatar Yani Abdurrahman, stated that it was true that there was news about the plans of foreign companies to become Premier Oil partners in the Tuna Block.

"So far there is no official information from Premier Oil, we are still waiting. It's just that the partner's plan has just arrived," said Susana Kurniasih.

It is an oil and Rosneft gas company from Russia that plans to join Premier Oil after news of the departure of one of the partners in the block. However, Fatar has not specified the participation rights that will be acquired by the new Russian partner.

The operator of the Tuna Block is Premier Oil Tuna BV with a participating interest of 65%. Fatar said that the Covid-19 pandemic had an impact on the drilling plan by Premier Oil, even though drilling was needed to ensure the Tuna Block Plan of Development (PoD). Not only that, but this is also considered to have an impact on the certainty of partners in the block.

As a flashback, in 2014 Premier Oil discovered potential reserves of 100 million barrels of oil equivalent (mmboe). Even Premier Oil said that currently, the potential for the Tuna Block could reach 100 million cubic feet to 150 million standard cubic feet per day (mmscfd). In 2017, Premier Oil and Petrovietnam signed a memorandum of understanding (MoU) for the sale of gas from the Tuna Block in the North Natuna Sea to Vietnam.

The signing of the MoU was carried out on the sidelines of the 2017 Asia Pacific Economic Cooperation Summit (APEC Summit) in Da Nang, Vietnam. The government has also provided guarantees for investment certainty in Natuna waters, especially the location of the Tuna Block which is directly adjacent to Vietnam.

Kontan, Page-12, Friday, August 14, 2020

Russian oil and gas company eyeing Tuna block

Russian oil and gas companies have the potential to enter and work on Participating Interest (PI) in the Tuna Block together with Premier Oil.

Deputy Head of the Special Task Force for Upstream Oil and Gas (SKK Migas), Fatar Yani Abdurrahman, did not dismiss the news of a Russian oil and gas company that wanted to become a partner of Premium Oil in the oil and gas working area in the Natuna Islands.

Rosneft Russia

Only he was still reluctant to mention the name of the Russian company. The reason, so far it is still waiting for official information from Premier Oil. It's just that the plans for new partners will enter do exist, "he said.

Fatar also has not detailed the rights of participation that will be acquired by the new Russian partner. Just so you know, the Tuna Block is managed by Premier Oil Tuna BV with an Interest Participation of 65%. 

Tuna Block Premier Oil Tuna BV

    The Acting Head of the SKK Migas Program and Communication Division, Susana Kurniasih, said that the government had given Premier Oil a two-year extension. The latest was approved by the Ministry of Energy and Mineral Resources at the end of 2019 ago.

Blogger Agus Purnomo in SKK Migas

"They already had a proposal for drilling two wells in 2020, but they said that the implementation of the activity was still waiting for a partner," Susana Kurniasih.

The Covid-19 pandemic also had an impact on the drilling plan by Premier Oil, even though drilling was needed to ensure the Tuna Block Plan of Development (PoD). This is also considered to have an impact on the certainty of partners in the Block.

Kontan, Page-10, Saturday, July 25, 2020

Tuban GRR refinery processes imported oil

All crude oil raw materials that will be processed at Tuban Refinery Grass Root Refinery (GRR) will be supplied from abroad. That is because the domestic oil content containing sulfur is very high although not as high as in the Middle East region.

"100 percent of the processed oil will be imported later, one of them from Venezuela because the oil that is managed is more acidic. In Indonesia, sweet oil is known," he said. 

Tuban GRR Project Coordinator from Pertamina, Kadek Ambara Jaya. The largest expected refinery in Southeast Asia will have a maximum capacity of 300 thousand barrels per day. To supply crude oil raw material needs, 60 percent is charged to Pertamina's partners, namely PT. Rosneft Oil Company and Russia.

"For that, the requirement to become a partner, partners must have oil fields and refineries," added Kadek.

The man born in Bali said the Tuban refinery will use advanced technology because it processes heavy oil. While the products produced are equivalent to Euro 5 quality.

"The Euro 5 spec has no odor, and its sulfur content is very low," he said.

Until now, the process of land acquisition for oil refinery construction is still ongoing and has reached around 95 percent. The remaining 30 hectares are estimated to be completed by the end of this month.

Harian Bangsa, Page-9, Thursday, July 9, 2020

Tuban GRR Refinery Explores EIA Study

The Pertamina Grassroot Refinery [GRR) Tuban oil refinery has presented the second Environmental Impact Analysis (EIA) study to the Tuban District Government. This EIA study is one of the stages in the construction of an oil refinery involving Pertamina and Rosneft, a company from Russia.

Tuban Regency Regional Secretary of East Java Province, Budi Wiyana said that public consultation played a very large role, as well as being a vehicle for stakeholders to submit suggestions and input related to oil refinery development.

Compilation of EIA documents to identify cross-sectoral impacts from refinery development, from product development stages to post-project completion.

"Amdal is certainly important, the document as a reference for the drafting, management, and monitoring of a number of impacts has been identified," said Budi.

The former Head of Bappeda explained that the development of oil refineries needs support and synergy from all parties, the regional government, Pertamina, and the community. The operation of the refinery will bring significant economic growth in Tuban Regency primarily to residents around the refinery.

The development of oil refineries is also able to create multiplayer effects, the start, and the emergence of new industries, entrepreneurship, and the need for a local workforce. The oil refinery is targeted to operate in 2026 with a production capacity of 300 thousand Barrels Per Day (BPD).

Surya, Page-7, Wednesday, July 8, 2020

Completing the Pertamina Refinery Project Requires Investors

Refinery investment reaches the US $ 40 billion

PT Pertamina (Persero) needs partners in funding all fuel refinery projects targeted for completion in 2026-2027. This is because the company's finances are unable to finance the investment needs of the refinery project, which is estimated at the US $ 48 billion.

Director of PT Pertamina International Refinery Ignatius Tallulembang said, as the Processing and Petrochemical Subholding of Pertamina, it was targeting to become the best processing and petrochemical company in the Southeast Asia region. 

    This was achieved by increasing Pertamina's refinery capacity to 1.8 million barrels per day (BPD) or the largest in the region. Investment needs to increase the capacity of the refinery from the current 1 million BPD to 1.8 million BPD, he said, reached the US $ 48-50 billion.

"If you use Pertamina's own funds, of course, you can't. So in building a refinery, Pertamina really needs a partner. Because in addition to funding shares, risk-sharing can be shared, "he said.

Tallulembang explained, in the partnership the company will also continue to issue cash. However, financing refinery projects will also be borne by partners. Pertamina opened two partnership schemes, namely strategic partners (strategic investors) and financial (financial investors).

"The point is that this strategic investor is a well-known oil and gas company and has built refineries. Usually, they are involved from the start, they will bring technology and expertise. They also usually have special requirements, for example offering crude oil or joint marketing, "he explained.

Furthermore, financial partners are usually only involved in funding. According to Tallulembang, the financial partners did not intervene too much on the project and gave Pertamina the flexibility to run its business.

"The important thing is the profit we will share [with financial partners] when dividend distribution," he said.

Rosneft Oil Company Russia

So far, Pertamina has partnered with Rosneft Oil Company as a strategic partner in the Tuban Refinery Project in East Java Province. Then, Pertamina has partnered with K-Sure and Exim Bank of South Korea as financial partners and is exploring similar cooperation with Mubadala Investment Company.

But the company is also still looking for partners to complete the Bontang Refinery Project in East Kalimantan Province and Cilacap Refinery in Central Java Province. 

    Pertamina was assigned by the government to work on the Balongan Refinery Project in West Java Province, Balikpapan Refinery in East Kalimantan, Bontang Refinery also in East Kalimantan, Cilacap Refinery in Central Java, and Tuban Refinery in East Java.

Mubadala Investment Company.

After the entire refinery project is completed in 2026-2027, in addition to the processing capacity increasing to 1.8 million BPD, the refinery will also produce 1.5 million BPD of fuel and 8,600-kilo tons of petrochemical products per annum.

Private Role

Not only the partnership scheme, Tallulembang added that the development of national refineries can also be done by involving the private sector or through the Cooperation between the Government and Business Entity (KPBU). This scheme has been regulated in a law, where private business entities can work together to build refineries with Pertamina as the person in charge.

"Unfortunately this scheme has not yet been used even though it is very possible, and Pertamina can take products from refineries built. The government as an off-taker when domestic energy demand is still high is still needed, "he said.

The Director of Oil and Gas Engineering and Environment of the Ministry of Energy and Mineral Resources (ESDM) Soerjaningsih revealed, since 2001, many national private companies have obtained permits to build fuel refineries. However, the huge investment costs, high technology, land issues, crude oil supply, and product off-takers are constraints so that not even one refinery has been realized.

In the assignment of refinery construction to Pertamina, the government opened up opportunities for cooperation for domestic and foreign companies.

"So Pertamina can partner with private entities, domestic and foreign, it is possible for that. We also provide many facilities, both for the assignment scheme and the PPP, "said Soerjaningsih.

Funding facilities include state capital participation (PMN), retained earnings, government loans, bond issuance, and loans with government guarantees. While the fiscal incentives include a 100% Tax Holiday, taxes in the framework of imports, as well as income tax facilities.

Chairman of the Association of Oil and Gas Companies (Aspermigas) John S Karamoy said many national private entrepreneurs were interested in building small-capacity refineries or mini-refineries. 

   However, he admitted that the refinery development plan met with many obstacles, one of which was the certainty of off-takers or buyers of refinery products. This can be overcome if the private refinery business gets a processing deal or a processing agreement from Pertamina.

"Private refineries that will be built can also be accelerated, which is important to get a processing deal, namely this refinery will process only where Pertamina's ready-to-sell products and refinery owners only get processing fees [processing fees]," he explained.

He said he was pushing for plans to build mini refineries in eight clusters again. Because the plan was announced by the government a few years ago, but it hasn't started yet. These eight clusters are North Sumatra, Maluku Long Strait, Riau, Jambi, South Sumatra, South Kalimantan, North Kalimantan, and Maluku.

"We, together with Regionally Owned Enterprises, want to realize and hope that the eight units can be completed in 2027," said John.

Investor Daily, Page-10, Monday, June 29, 2020

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.

Pertamina Refinery Project Continues

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