Capacity Refinery 2 Million BPD

    PT Pertamina (Persero) accelerate the expansion of refinery development in line with the increase of domestic oil and gas demand. President Director of PT Pertamina (Persero) Elia Massa Manik stated that this year the company has budgeted capital expenditure with a 37 percent increase compared to last year.

"The increase is mostly used for capital expenditure upstream sector," he said in the House of Representatives building.

    Total capital expenditure this year reached USD 5.59 billion. Last year, the company's Capex only reached USD 3.6 billion. The largest capital expenditure is used for upstream development of 59 percent. As for the processing of petrochemicals can reach 15 percent of the total budget.

    This includes the development of several refinery projects. Among other things, the development of RDMP (Refinery Development Master Plan), GRR (gross root refinery), PLBC, increased flexibility of refinery crude, and the development of derivative products.

    The company currently develops 4 RDMP and 2 GRR. The total funds spent by the company for the project development reached USD 55 billion. The project is expected to increase the company's total refinery capacity by 2 million barrels per day (bpd) by 2025.

    In 2018, the company targets the total refinery capacity to reach 1 million barrels per day. The increase in refinery capacity is also targeted to improve the quality of the company's fuel production such as the Euro 4 development which will be implemented by the government in October 2018.

    In 2021, the company targets refinery capacity to increase to 1.1 million barrels with the operation of RDMP Balikpapan phase I. In 2023, the total refinery capacity is expected to increase to 1.3 million barrels per day.

Rosneft Russia

     

    Furthermore, in 2024, the company's refinery capacity will again increase to 1.7 million barrels per day with the operation of the GRR Tuban project. The project is planned to partner with Rosneft Russia. In the same year, Dumai RDMP also operated. Peak, by 2025, the company's refinery capacity will increase to 2 million barrels per day.

Jawa Pos, Page-6, Tuesday, Jan 30, 2018

Pertamina and Rosneft Build Tuban Refinery

The subsidiary of PT Pertamina, PT Kilang Pertamina Internasional (KPI), and the Rosneft Oil Company affiliate, Petrol Complex PTE LTD signed the deed of establishment of a joint venture. The company, PT Pertamina Rosneft Processing and Petrochemical (PRPP) will build and operate a new oil refinery integrated with the Petrochemical Complex (New Grass Root Refinery and Petrochemical / NGRR) in Tuban Regency, East Java.

KPI Director Achmad Fathoni Mahmud said Pertamina-Rosneft had agreed on a 55 percent stake in the joint venture company PRPP for Pertamina and the remaining 45 percent for Rosneft. This is in line with the planned development of Tuban NGRR with a capacity of 300 thousand barrels per day with a total investment value of up to 15 billion US dollars.

According to him, the Tuban NGRR project will provide great economic and social benefits for the nation and the country in the future.

"This project will increase energy independence and resilience by increasing the production of national fuel oil quality Euro V. Refinery will also produce new Petrochemical products," he said.

Achmad Fathoni added that the construction of the Tuban NGRR mega project is estimated to require 20 thousand-40 thousand workers and about 2,000 people after the operation. According to him, the project will also have a positive impact in the form of tax for government and national and regional society.

The estimated fuel product that will be generated by Tuban NGRR is gasoline at 80 thousand barrels per day, 99 thousand barrels of diesel per day, and avtur 26 thousand barrels per day. Meanwhile, for new products, Petrokimia is 1.3 million tons of polypropylene per year, polyethylene 0.65 million tons per year, 0.5 million tons of styrene per year, and paraksilen 1.3 million tons per year.

The Board of Directors of PT Pertamina Rosneft Petrokimia Processing consists of Amir H ​​Siagian as President Director and Alexander Dmitriev and Bambang Sembodo as directors.

Meanwhile, Deputy of Investment Coordination (BKPM) Lestari Indah explained that BKPM strongly supports the establishment of an Indonesian legal entity on behalf of PT PRPP between Pertamina and Rosneft.

"The establishment of PT PRPP in the oil refinery business with planned employment of up to 40 thousand is the implementation of the National Strategic Project which is expected to balance the demand-supply of oil and gas supply, thus giving a positive impact on Indonesia's economic growth," Lestari explained.

Republika, Page-13, Wednesday, Nov 29, 2017

Oil Refinery most modern in the World Will Build in Tuban

Earth Guardians Tuban really going to be a solid border region with heavy industry. Not just the two cement companies, power plants, TPPI already standing, but in the near future will also stand in the world's most modern oil refinery. 

Rosneft Oil Company

    Why claimed most modern in the world? because the refinery to be built by PT Pertamina and state oil and gas companies of Russia, Rosneft Oil Company is using the Nelson Complexity Index (NCI) was 9.4 whereas Pertamina refineries NCI now its 4.6.

NCI it's Singapore refinery 6.4 and the highest in the world NCI its 7.2. Currently, the state has started to socialize development Tuban refinery capacity of 300 thousand barrels per day (CPD). In the early stages of development that are the focus of this refinery is to accelerate the evaluation of the Environmental Impact Assessment Study (EIA).

"We knocked on the door to Tuban regency to deliver modern crude oil processing project director Mega Project Processing and Petrochemical Pertamina Rachmad Hardadi. Rachmad Hardadi hopes EIA study can be completed during the six months starting in January 2017. 

    The construction and development of oil refineries in the country based on Government Regulation (PP) No. 146 the Year 2015. The reason for choosing Tuban became the center of the national refinery project because of its strategic location. Simultaneously will be integrated with Petrochemical (TPPI) in Tuban.

Pertamina and Rosneft on December 14, 2016, have made the kick-off for the EIA and the Environment and SOCIDZ Impact Analysis (ESIA). Starting from Monday, January 9, 2017, the company announced the implementation of an integrated EIA for the construction and operation of Tuban refinery. At the same time inviting the public to submit comments, suggestions, and feedback until the deadline until January 20, 2017.

Tuban Regent Fath Huda expects all stakeholders to support the passage of Tuban refinery project, Impact multiplier effect (multiplier effects) will be felt gradually, both in terms of economic, social, and cultural communities. Hopefully, investors are coming to build an oil refinery is to bring benefits to the citizens of Tuban, gone was brought benefits to society, "he said.

IN INDONESIAN

Kilang Minyak Termodern di Dunia Bakal Dibangun di Tuban

Bumi Wali Tuban benar-benar akan menjadi wilayah perbatasan yang padat dengan industri berat. Tidak hanya dua perusahaan semen, PLTU, TPPI yang sudah berdiri, akan tetapi dalam waktu dekat juga akan berdiri kilang minyak paling modern di dunia. 

   Kenapa diklaim terrnodern di dunia ? karena kilang yang akan dibangun oleh PT Pertamina bersama perusahaan Migas dari negara Rusia, Rosneft Oil Company ini menggunakan Nelson Complexity Index (NCI)-nya 9,4 padahal kilang-kilang Pertamina sekarang NCI-nya 4,6.

Kilang Singapura NCI-nya 6,4 dan yang tertinggi di dunia NCI-nya 7,2. Saat ini, BUMN ini memulai mensosialisasikan pembangunan kilang Tuban berkapasitas 300 ribu barel per hari (BPH). Pada tahap awal yang menjadi fokus pembangunan kilang ini adalah mempercepat evaluasi Studi Analisis Mengenai Dampak Lingkungan (Amdal).

“Kami mengetuk pintu ke Pemkab Tuban untuk menyampaikan proyek pengolahan minyak mentah modern kata Direktur Mega Proyek Pengolahan dan Petrokimia Pertamina Rachmad Hardadi. Rachmad Hardadi berharap Studi Amdal dapat selesai selama enam bulan terhitung sejak Januari 2017. 

   Pelaksanaan pembangunan dan pengembangan kilang minyak di dalam negeri berlandaskan Peraturan Pemerintah (PP) Nomor 146 Tahun 2015. Alasan terpilihnya Kabupaten Tuban menjadi pusat proyek kilang nasional karena lokasinya strategis. Sekaligus bakal diintegrasikan dengan Petrokimia (TPPI) di Tuban. 

Pertamina dan Rosneft pada 14 Desember 2016 telah melakukan kick off untuk Amdal dan Environment and SOCIDZ Impact Analysis (ESIA). Terhitung mulai Senin 9 Januari 2017 pihaknya mengumumkan pelaksanaan Amdal terpadu untuk pembangunan dan pengoperasian kilang Tuban. Sekaligus mengundang masyarakat untuk menyampaikan tanggapan, saran dan masukan hingga batas waktu sampai dengan 20 Januari 2017.

Bupati Tuban Fathul Huda berharap semua stakeholders mendukung dimulainya proyek kilang Tuban, Dampak multiplier effect (efek berantai) nantinya akan dirasakan secara perlahan, baik dari segi ekonomi, sosial, dan budaya oleh masyarakat. Semoga investor yang datang membangun kilang minyak ini membawa manfaat kepada warga Tuban, setelah pergi pun membawa magfiroh untuk masyarakat,” katanya.

Bhirawa, Page-1, Monday, Jan 16, 2017

Pertamina and Rosneft Deposit 200 Million US Dollars

PT Pertamina and Rosneft, an oil and gas company owned by Russia, agreed to deposit funds of 200 million US dollars or around Rp. 2.6 trillion each for the joint venture formed by the two companies.

Rosneft

The joint venture of Pertamina (55 percent) and Rosneft (45 percent) will build a new refinery in Tuban, East Java, with a capacity of 300,000 barrels per day. "On October 5, we agreed to sign a joint venture agreement to realize the Tuban refinery project," said Director of the Processing and Petrochemical Megaproject Rachmad Hardadi.

Kompas, Page-18, Monday, Oct 31, 2016

House of Representatives Encourages Development Schemes to Become Assignments

    Commission VII of the Indonesian House of Representatives hopes that the construction of a new oil refinery with a capacity of 300 thousand barrels per day (BPD) in Bontang, East Kalimantan can be accelerated. One of the efforts to accelerate this is by changing the development scheme to an assignment to PT Pertamina.

    Member of Commission VII of the Indonesian House of Representatives Dito Ganinduto said the plan to build the Bontang Refinery had been implemented two years ago. 

    However, the government has yet to decide which investors will work on this project. The Government and Business Entity Cooperation Scheme (PPP) implemented in this project are considered to have slowed refinery construction.

"This is a project, so using a consultant, evaluated one by one. I think this is too long-winded, ”he said during a working visit to the Bontang LNG Plant.

    The progress of the Bontang Refinery is very different when compared to the Tuban Refinery which was carried out under an assignment scheme to Pertamina. Because it is in the form of assignments, Pertamina can move faster so that it has reached the stage of forming a joint venture with its partner, Rosneft Oil Company.

Rosneft Oil Company.

    The legal protection already exists, why can't it just be changed at the Bontang refinery into an assignment scheme to Pertamina. In the next meeting with the Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan, Dito stated that he would suggest that the Bontang Refinery be built an assignment scheme. This is because Indonesia needs four new refineries in 2025 to achieve self-sufficiency in fuel oil (BBM).

    Until now, not a single project has started construction. Moreover, the land needed for the construction of the Bontang Refinery is also ready and there is no need to purchase land.

    The Bontang government is also ready to provide full support by facilitating licensing so that refineries can be built immediately. If (Bontang Refinery) can do the assignment, everything is ready, just waiting to start.

    Deputy Chairman of Commission VII of the Indonesian People's Representative Council, Fadel Muhammad, also emphasized the need for the construction of the Bontang Refinery be accelerated. 

    This is because, although it is a large country with a very large population, Indonesia has not built a new refinery for 25 years. This he called something wrong. Therefore, he hopes that the Bontang Refinery can be built immediately.

"This infrastructure is ready, local government support is very good, the House of Representatives will also provide full support for this.

    Mayor of Bontang, Neni Moerhaeni, said that there are two large factories in Bontang City, namely the LNG Refinery from Badak NGL and the Kaltim Pupuk Factory. With the existence of these two large factories, Bontang City has contributed around 10% of the 30% total contribution of East Kalimantan to the state budget. 

    We are excited to encourage the construction of a new refinery by the government to be located in Bontang. We also appreciate Pertamina for being no less encouraging to realize this project.

    Regardless of the scheme used at the Bontang Refinery, Pertamina's Director of Megaproject Processing and Petrochemical Rachmad Hardadi said Pertamina would accelerate the construction of the Bontang Refinery. 

    From the investor selection stage and the Bankable Feasibility Study / BFS, he said it was still under the authority of the government. However, it is hoped that this stage can be completed by the end of 2017. Furthermore, from early or mid-2018, Pertamina will begin to assist investors in land acquisition.

"This site preparation clean up is due to the fact that some areas are still swampy, it will take three years".

    But we will speed up to just 1.5 years. Assuming the land is ready in 2019, the Bontang Refinery is targeted to be completed in mid-2023. Currently, his party is still waiting for the government. This is because the construction of the Bontang Refinery is still in the stage of selecting consultants by the government. After the consultant is selected at the end of November, then Pertamina and the consultant will start selecting investors.

    Unfortunately for the partner selection stage, this cannot be as fast as when Pertamina chose a partner for the Tuban Refinery. This is because the government determines who are the appropriate partners.

"For the assignment scheme, I can do it myself. If the PPP has to report it first and the accompanying consultant must be convinced. So if the assignment can be completed in three months, if it is PPP it can be 1-1.5 years. 

    Assuming the consultant is selected by the end of November, the selection of partners for the Bontang Refinery can begin immediately. Pertamina itself has prepared a list of potential investors. 

    The prediction is that the selection of this partner will be completed by the end of 2017. Pertamina's President Director Dwi Soetjipto stated his readiness if the Bontang Refinery development scheme is changed to an assignment. 

    Although not the majority, the company is also ready to fund some of the investment needs for the 300 thousand BPD refinery project. In the future, Pertamina will acquire partner shares bit by bit.

"Our target is towards the majority, but the inclusion is gradual on the way. In accordance with Presidential Regulation (Perpres) number 146 of 2015 which is the basis for accelerated refinery development, refinery funding with the government and business entity cooperation (PPP) scheme and assignments is indeed different. 

    For PPP, financing is borne by private business entities. Meanwhile, the financing for the assignment scheme can be borne by the government or the corporation.

    If the assignment scheme is funded by the government, Pertamina is obliged to ensure that the project is completed according to the given budget and timeframe, as well as guarantee the supply of crude oil. if it is funded by a corporation, Pertamina is allowed to work on its own or in cooperation with other business entities. 

    Indonesia needs to build new refineries, given the high demand for fuel. Until 2025, the demand for gasoline is predicted to increase by 7% and diesel oil by 5%. With the two new refineries, the national gasoline and diesel production capacity will increase to 1.2 million BPD from the current 537 thousand BPD.

Investor Daily, Page-9, Monday, Oct 24, 2016

The World Bank Provides Positive Prospects

The agreement of oil-exporting countries to cut production makes the World Bank install a positive prospect of world oil prices next year. In the October 2016 Commodity Market Outlook (CMO) report, the World Bank predicted that world oil prices in 2017 would reach US $ 55 per barrel. The projection is up from the previous report which reached US $ 53 per barrel. For oil prices this year, the World Bank still maintains its projections at US $ 43 per barrel. 

"There will be a significant increase in prices of world commodity prices next year, where crude oil will be the leader of the increase,"

John Baffles, World Bank Senior Economist, Baffles said, his party saw the price of a number of energy commodities such as natural gas, coal, and crude oil would rise by 25% in 2017. The estimate was based on OPEC's decision at a meeting in Algeria last month. 

The world organization, led by Saudi Arabia, agreed to cut world oil production by 700,000 barrels per day, from its normal production range of 33.24 million barrels per day. The price of a number of commodity products is predicted to rise due to an increase in global demand. Metal and mineral prices will rise 4.1% in 2017, up 0.5% from the previous prediction.

The close of a number of zinc mining giants in several countries has the opportunity to make a supply in the world decline. As a result, the price of these products will rise by 20% in 2017. The price of agricultural products is also predicted to rise by 1.4% next year. The only decline in prices occurred in gold. The price of gold in 2017 is projected to fall to US $ 1,219 per ounce. 

This was due to sentiment over the planned hike in the Fed's benchmark interest rate, which caused safe-haven asset purchasing activities to decline. 

"Low commodity prices have hit developing countries that rely on exports of natural products. However, we see that next year commodity prices will begin to recover, "said Ayhan Kose, Director of World Bank Development Prospects.

The World Bank asserted, next year uncertainty on the price and demand for commodity products, especially oil, is still haunted by uncertainty. Because Opec has not released details and official documents on the decision to cut world oil production released last month. 

In addition, there is no definite evidence related to the involvement of non-OPEC member countries to participate in limiting production, making the world oil prices' opportunity to fluctuate again. As is well known, the most influential non-member countries of OPEC namely Russia have declared themselves to be involved in the policy of limiting oil production.

Vladimir Putin

The declaration was expressed by Russian President Vladimir Putin himself at the Energy World Congress meeting in Istanbul earlier this month. However, Putin's remarks were immediately opposed by Russia's biggest oil producer, Rosneft. 

Rosneft 

In his official statement, Chief Executive Rosneft Igor Sechin refused to join the government in limiting production. As is known, Rosneft accounts for 40% of Russia's oil production. Rosneft produces 4.1 million barrels per day.

Bisnis Indonesia, Page-3, Saturday, Oct 22, 2016.

Pressure Increases, Oil Is Getting Eroded

Ahead of the OPEC meeting, WTI crude oil even showed symptoms of uncertainty that led to weakening prices. Quoting Bloomberg, Monday (18/10) at 17.55 West Indonesia Time, the price of WTI oil for November 2016 delivery contract on the New York Mercantile Exchange eroded 0.22% to the US $ 50.24 per barrel.

In the past week, the price of WTI oil fell 2.16%. According to Deddy Yusuf Siregar, Research, and Analyst at PT Asia Tradepoint Futures, the results of the United States (US) oil stock report made the market falter.

Because Uncle Sam's country apparently has black gold-stock ready to sell up to 4.9 million barrels. Previously, US oil stockpiles were predicted to be only 0.4 million barrels. This triggers fears of oil flooding in the global market. 

    Because there was profit-taking after the previous week the price of oil reached its highest level. As if that wasn't enough, the Baker Hughes report said, despite having abundant stockpiles, the US actually intensified its oil production. There were at least four new drilling points in the US last week.

Excessive oil production does not only occur in the US. Nizar Hilmy, an analyst at PT Soegee Futures, said OPEC's oil production output in September rose again.

"Iran and Venezuela are the biggest contributors to OPEC," Nizar said.

Vladimir Putin  and Igor Sechin

Uncertainty in oil prices resurfaced after Russian President Vladimir Putin and Chief Executive Officer (CEO) Rosneft Igor Sechin issued conflicting statements.

Rosneft is an oil company owned by the Russian Government. Putin and Sechin disagreed over Russia's participation in production cuts. But, there is still hope from Asian demand that could push oil prices up.

"Oil demand in India rose 4.4% last week," explained Deddy.

Until the end of the year, Deddy predicted, oil prices could move in the range of US $ 50-US $ 55 per barrel. If the OPEC agreement on production cuts is truly realized and obeyed by its members, the price of WTI oil can rise to the level of US $ 60 per barrel.

But technically, oil does need correction as it enters the overbought area. Prices are still rolling above the MA 50, MA 100, and MA 200. While the stochastic index tends to fall and read in the 45 areas. 

   Only, the RSI tends to strengthen in the 54 areas, also the MACD is still read in the positive area. Nizar projects that today (18/10) oil prices will strengthen in the range of the US $ 49.50-US $ 52 per barrel. While Deddy estimates, oil prices move between the US $ 48 to the US $ 51 per barrel in a week.

Kontan, Page-7, Tuesday, Oct 18, 2016