Luhut Opens New Option for Cilacap Refinery Development

Maritime and Investment Coordinating Minister Luhut Binsar Panjaitan said there were other options for the development of the Cilacap Refinery if PT Pertamina (Persero) and Saudi Aramco did not reach an agreement. This is because both of them are still negotiating about the size of the asset valuation of the Cilacap Refinery.

Luhut Binsar Panjaitan

Pertamina has cooperated with Saudi Aramco to work on this project since 2014. In 2016, both of them even signed a joint venture development agreement (JVDA) agreement. However, until now, the two have not yet formed this joint venture because there is no asset valusi agreement yet.

Saudi Aramco

According to Luhut, Pertamina and Saudi Aramco are still conducting valuations and have not yet finished. The government will evaluate this project because there are still differences in the results of valuations conducted by each oil and gas company around US $ 1.5 billion.

"If it remains that much [the difference in asset valuations], we see other options, there are already other choices," he said in Jakarta.

This asset valuation is needed to fulfill one of the requests of the Saudi Arabian oil and gas company, namely Spin Off Assets to be subsequently included in a joint venture. However, the problem of asset valuation differences in the Cilacap Refinery has dragged on. 

     Director of Processing and Petrochemical Megaproject Ignatius Tallulembang said, this was the umpteenth evaluation done by his side. However, different from before, this valuation was carried out by an international finance advisory firm (international financial advisor) who was jointly appointed by the two companies. The results of this valuation have not yet come out.

"[With Saudi Aramco] already started, move forward," he said after a meeting with Minister Luhut.

He said the results of the asset valuation of the Cilacap Refinery will be released and will be agreed soon at the end of this year. Luhut said, the first valuation was carried out for other purposes, so that it was only used as an estimated project, which was around US $ 2.8 billion. Furthermore, with the approval of Saudi Aramco, Pertamina conducts valuations in accordance with the Financial Services Authority (OJK) standards.

Unfortunately, Saudi Aramco did not agree on the figures resulting from this valuation due to differences in parameters and assumptions. Next, he said, Pertamina conducted a valuation by appointing the best consultant in the international world, namely Price Water House Cooper (PWC). The appointment of the PWC was as required by Saudi Aramco, who asked to appoint one of the world's four major consultants.

Price Waterhouse Coopers (PWC)

However, the results of the PWC valuation, after negotiations, there was still no agreement from Saudi Aramco. Previously, Pertamina had expressed its ability to work on the Cilacap Refinery with or without Saudi Aramco. In fact, Tallulembang mentioned that it had prepared a new scheme. 

     In this new scheme offered, among others, Saudi Aramco began to be involved after Pertamina completed the development of the Cilacap Refinery. Thus, Pertamina will bear the development costs by itself. But it does not rule out the possibility of the company looking for funding partners in completing the refinery project.

In fact, parallel with valuation, it is ready to execute land acquisition for the Cilacap Refinery Project. In addition, the company is also holding an auction to find a contractor working on early work or site development. The signing of the early work contract is targeted to be carried out in December. The Cilacap refinery is targeted to start operating in 2025. 

      After upgrading, the crude oil processing capacity of the Cilacap Refinery will increase from 348 thousand barrels per day (bpd) to 400 thousand bpd. Furthermore, there will be additional production of gasoline (gasoline) 80 thousand bpd, diesel 60 thousand bpd, and aviation fuel of 40 thousand bpd. Fuel production increased significantly because the ability of refineries to process crude oil into finished products (NCI) rose from 74% to 92-98%.

Accelerated

At the same time, Luhut also asked Pertamina to accelerate the work on refinery projects. He requested that the company work on all refinery projects in parallel.

"So it's parallel, so that we can speed up the time maybe biennial, now we are evaluating one by one. "I have already identified, next week Pertamina will report me again about the time table," he said.

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif also expressed the same thing. To accelerate the construction of the refinery, he will try to overcome the obstacles of this project, such as regulations, permits, and domestic problems.

"The Coordinating Minister for Maritime Affairs Luhut hopes that soon it will be possible. "In the next five years," he said.

Previously, Tallulembang had conveyed the progress of the refinery projects, where an important stage would be reached by the company in December this year.

"All projects are moving, everything is underway. So we accelerated and everything went according to the target, nothing was left behind, "he said.

Referring to the Committee for the Acceleration of Priority Infrastructure Provision (KPPIP), the investment value of all Pertamina refinery projects reached Rp 643.11 trillion. The entire refinery project is targeted to be completed in 2027. 

     With the construction of the refinery, the company's processing capacity will increase to 2 million bpd with a fuel production rate of 1.7 million bpd, from the current 1 million bpd. Thus, Pertamina will be able to meet the fuel needs in the next five years amounting to 1.7 million bpd, assuming growth in fuel needs is 3-4% per year and current needs are 1.5 million bpd.

IN INDONESIA

Luhut Buka Opsi Baru Pengembangan Kilang Cilacap

Menteri Koordinator Kemaritiman dan Investasi Luhut Binsar Panjaitan menyatakan ada opsi lain untuk pengembangan Kilang Cilacap jika PT Pertamina (Persero) dan Saudi Aramco tidak mencapai kesepakatan. Hal ini mengingat keduanya masih negosiasi soal besaran valuasi aset Kilang Cilacap.

Pertamina telah menggandeng Saudi Aramco untuk menggarap proyek ini sejak 2014 silam. Pada 2016, keduanya bahkan telah meneken perjanjian pembentukan perusahaan patungan (join venture development agreement/JVDA). Namun, hingga kini, keduanya belum juga membentuk perusahaan patungan ini lantaran belum ada kesepakatan valusi aset. 

Menurut Luhut, Pertamina dan Saudi Aramco masih melakukan valuasi dan belum selesai. Pemerintah akan mengevaluasi proyek ini mengingat masih ada perbedaan hasil valuasi yang dilakukan oleh masing-masing perusahaan migas sekitar US$ 1,5 miliar. 

“Kalau masih tetap segitu [selisih valuasi aset], kami melihat pilihan lain, sudah ada pilihan lain,” kata dia di Jakarta.

Valuasi aset ini dibutuhkan untuk memenuhi salah satu permintaan perusahaan migas Arab Saudi itu, yakni Spin Off Aset untuk selanjutnya dimasukkan dalam perusahaan patungan (joint venture). Namun, permasalahan perbedaan valuasi aset Kilang Cilacap ini sudah berlarut-larut. 

     Direktur Megaproyek Pengolahan dan Petrokimia Ignatius Tallulembang menuturkan, ini valuasi yang kesekian kali dilakukan pihaknya. Namun, berbeda dengan sebelumnya, valuasi ini dilakukan oleh perusahaan konsultan pembiayaan internasional (internasional financial advisor) yang ditunjuk bersama oleh kedua perusahaan. Hasil valuasi ini belum keluar.

“[Dengan Saudi Aramco] sudah dimulai, bergerak maju lah,” ujar dia usai rapat dengan Menteri Luhut. 

Hasil valuasi aset Kilang Cilacap disebutnya akan keluar dan segera disepakati akhir tahun ini. Luhut menceritakan, Valuasi yang pertama dilakukan untuk keperluan lain, sehingga hanya digunakan sebagai perkiraan proyek saja, yakni sekitar US$ 2,8 miliar. Selanjutnya, atas persetujuan Saudi Aramco, Pertamina melakukan valuasi sesuai dengan standar Otoritas Jasa Keuangan (OJK). 

Sayangnya, Saudi Aramco tidak menyepakati angka yang dihasilkan dari valuasi ini lantaran adanya perbedaan parameter dan asumsi. Berikutnya, Pertamina disebutnya melakukan valuasi dengan menunjuk konsultan terbaik di dunia internasional, yakni Price Water House Cooper (PWC). Penunjukkan PWC sesuai yang disyaratkan Saudi Aramco yang meminta untuk menunjuk salah satu empat konsultan besar dunia.

Namun, hasil valuasi PWC ini, setelah dilakukan negosiasi, tetap tidak ada kata sepakat dari Saudi Aramco. Sebelumnya, Pertamina pernah mengungkapkan mampu menggarap Kilang Cilacap dengan atau tanpa Saudi Aramco. Bahkan, Tallulembang sempat menyebut telah menyiapkan skema baru. 

      Dalam skema baru ini yang ditawarkan antara lain Saudi Aramco mulai terlibat setelah Pertamina menyelesaikan pengembangan Kilang Cilacap. Sehingga, Pertamina menanggung sendiri biaya pengembangan yang dilakukannya. Namun tidak menutup kemungkinan perseroan mencari mitra pendanaan dalam penyelesaian proyek kilang.

Bahkan, paralel dengan dilakukannya valuasi, pihaknya siap mengeksekusi pengadaan lahan untuk Proyek Kilang Cilacap. Selain itu, perseroan juga sedang menggelar lelang untuk mencari kontraktor yang mengerjakan early work atau penyiapan lokasi (site development). Penandatanganan kontrak pekerjaan early work ini ditargetkan dilakukan pada Desember nanti. 

     Kilang Cilacap ditargetkan mulai beroperasi pada 2025. Pasca upgrading, kapasitas pengolahan minyak mentah Kilang Cilacap akan naik dari 348 ribu barel per hari (bph) menjadi 400 ribu bph. Selanjutnya, akan ada tambahan produksi bensin (gasoline) 80 ribu bph, solar 60 ribu bph, dan avtur 40 ribu bph. Produksi bahan bakar meningkat signifikan lantaran kemampuan kilang mengolah minyak mentah menjadi produk jadi (NCI) naik dari 74% menjadi 92-98%.

Dipercepat

Pada saat yang sama, Luhut juga meminta Pertamina untuk mempercepat pengerjaan proyek-proyek kilang bahan bakar minyak (BBM). Pihaknya meminta agar perseroan menggarap seluruh proyek kilang secara paralel.

“Jadi paralel, sehingga kami bisa percepat waktunya mungkin dua tahunan, sekarang kami evaluasi satu per satu. Tadi sudah di identifikasi, minggu depan Pertamina lapor saya lagi bagaimana time table-nya,” tutur dia.

Menteri Energi dan Sumber Daya Mineral (ESDM) Arifin Tasrif juga mengungkapkan hal yang sama. Untuk mempercepat pembangunan kilang, pihaknya akan berupaya mengatasi hambatan proyek ini, seperti peraturan, perizinan, dan masalah dalam negeri. 

“Pak Menko Maritim Luhut berharap bisa segera mungkin. Dalam lima tahun ke depan lah,” ujarnya.

Sebelumnya, Tallulembang telah menyampaikan progres proyek-proyek kilang ini, di mana tahapan penting akan dicapai perseroan pada Desember tahun ini. 

“Semua proyek sudah bergerak, sudah berlangsung semua. Jadi kami lakukan percepatan dan semua berjalan sesuai target, tidak ada yang tertinggal,” kata dia.

Mengacu data Komite Percepatan Penyediaan Infrastruktur Prioritas (KPPIP), nilai investasi seluruh proyek kilang Pertamina ini mencapai Rp 643,11 triliun. Seluruh proyek kilang perseroan ini ditargetkan selesai pada 2027. Dengan adanya pembangunan kilang maka kapasitas pengolahan perseroan akan naik menjadi 2 juta bph dengan tingkat produksi BBM 1,7 juta bph, dari saat ini 1 juta bph. Sehingga, Pertamina akan mampu memenuhi kebutuhan BBM dalam lima tahun mendatang sebesar 1,7 juta bph, dengan asumsi pertumbuhan kebutuhan BBM 3-4% per tahun dan kebutuhan saat ini 1,5 juta bph.

Investor Daily, Page-9, Tuesday, Nov 12, 2019

Targeting Oil and Gas Cooperation in the Middle East

The government seeks to increase investment in the oil and gas subsector (oil and gas). One of them is aiming for cooperation with a number of countries in the Middle East region, namely Iraq and Azerbaijan. 

    Director of ESDM Ministry of Oil and Gas Development Program Soerjaningsih stated that the government had offered oil and gas exploration in Azerbaijan and imported crude oil.

"Iraq is also the main target of cooperation in developing the petrochemical industry, refinery construction, and oil and gas exploration in the country "through PT Pertamina (Persero)," said Soerjaningsih.

According to Soerjaningsih, Pertamina is interested in the Tuba Oil Field project in Iraq. Now it's still under discussion.

"The partnership between the two countries is still exploration or negotiation. We will discuss this later in a bilateral meeting between the two countries, "said Soerjaningsih.

Investment in the oil and gas sector abroad is not new to the Republic of Indonesia (RI). Throughout 2018 there were four main collaborations in the oil and gas sector which were successfully agreed upon. 

    First, RI-Russia and Rosneft built the GRR Tuban refinery with an investment of USD 15 billion - USD 16 billion. Then, RI-Saudi Arabia with Saudi Aramco worked on the Cilacap refinery RDMP project with an investment of USD 5.4 billion-USD 6 billion.

Next is RI-Azerbaijan. Namely, Pertamina with SOCAR in terms of crude oil imports and oil and gas field exploration. The investment value will be known after the signing of the memorandum of understanding. The fourth, RI-Bangladesh and RI-Pakistan work together to supply LNG with a receipt value of USD 14.3 billion.

"Cooperation with various countries is expected to be able to maintain the investment trend in the ESDM sector," said Soerjaningsih.

Realization of investment in the ESDM sector in 2018 reached USD 32.2 billion, equivalent to Rp 462.183 trillion. Of this amount, USD 12.5 billion represents the realization of the oil and gas subsector. 

     This gain has increased compared to 2017 with the achievement of the upstream and downstream oil and gas sector which has an investment of USD 11 billion. The 2018 oil and gas lifting only reaches 778 thousand barrels of oil per day and 1.139 million barrels of oil equivalent per day.

IN INDONESIAN

Incar Kerja Sama Migas di Timteng

Pemerintah berupaya meningkatkan investasi subsektor minyak dan gas bumi (migas). Salah satunya membidik kerja sama dengan sejumlah negara di kawasan Timur Tengah, yakni Iraq dan Azerbaijan. 

   Direktur Pembinaan Program Migas Kementerian ESDM Soerjaningsih menyatakan, pemerintah mendapat tawaran eksplorasi lapangan migas di Azerbaijan dan impor minyak mentah. 

"Iraq juga menjadi sasaran utama kerja sama dalam pengembangan industri petrokimia, pembangunan kilang, dan eksplorasi lapangan migas di negara tersebut melalui PT Pertamina (Persero)," kata Soerjaningsih.

    Menurut Soerjaningsih, Pertamina berminat pada proyek Tuba Oil Field di Iraq. Sekarang masih dalam tahap pembahasan. 

”Kemitraan kedua negara sifatnya masih penjajakan atau negosiasi. Nanti dibahas lebih lanjut dalam pertemuan bilateral antar kedua negara,” tutur Soerjaningsih.

Investasi sektor migas di luar negeri bukan hal baru bagi Republik Indonesia (RI). Sepanjang 2018 ada empat kerja sama pokok di sektor migas yang berhasil disepakati. Pertama, RI-Rusia dengan Rosneft membangun kilang GRR Tuban dengan nilai investasi USD 15 miliar - USD 16 miliar. Lalu, RI-Arab Saudi dengan Saudi Aramco mengerjakan proyek RDMP kilang Cilacap dengan investasi USD 5,4 miliar-USD 6 miliar.

Berikutnya RI-Azerbaijan. Yakni, Pertamina dengan SOCAR dalam hal impor minyak mentah dan eksplorasi lapangan migas. Nilai investasinya akan diketahui setelah penandatanganan nota kesepahaman. Yang keempat, RI-Bangladesh serta RI-Pakistan bekerja sama untuk pasokan LNG dengan nilai penerimaan USD 14,3 miliar. 

”Kerja sama dengan berbagai negara ini diharapkan mampu menjaga tren investasi sektor ESDM" kata Soerjaningsih.

Realisasi investasi di sektor ESDM pada 2018 mencapaiangka USD 32,2 miliar atau setara Rp 462,183 triliun. Dari jumlah tersebut, USD 12,5 miliar merupakan realisasi dari subsektor migas. Perolehan tersebut mengalami peningkatan jika dibandingkan 2017 dengan capaian sektor migas di hulu dan hilir yang mengantongi investasi USD 11 miliar. Adapun lifting minyak dan gas bumi 2018 hanya mencapai 778 ribu barel minyak per hari dan 1,139 juta barel setara minyak per hari.

Jaw Pos, Page-6, Monday, Jan 14, 2019

Pertamina & Aramco Form a Joint Venture

PT Pertamina (Persero) targets the establishment of a joint venture with Saudi Aramco for the revitalization project of Cilacap Refinery in Cilacap Regency, Central Java, can be realized next year.

Saudi Aramco

Pertamina Corporate Secretary Syahrial Muchtar said that the Cilacap Refinery development plan (RDMP) plan was still going according to plan and there were no obstacles. The oil and gas company owned by the Kingdom of Saudi Arabia which is Pertamina's partner in revitalizing the Cilacap Refinery is still committed to increasing the refinery's capacity.

"[Establishment of a joint venture company] we must start next year. Everything is still consistent, "he said, Monday (12/17).

Syahrial stressed that the ownership of each party in the joint venture did not change. In the joint venture, Pertamina has controlled 55% shares and Aramco has 45%. However, both parties are still calculating assets in the revitalization process of the Cilacap Refinery. The two companies have different value calculations so they have not yet obtained an agreement.

"That's normal. They count, we also count. This is the stipulation in what number will be agreed upon. "

Arcandra Tahar 

Previously, Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar acknowledged, currently related to the Cilacap Refinery project, Pertamina is evaluating the establishment of a joint venture in order to obtain benefits in accordance with the business framework.

"The business framework already exists, but for example Cilacap, the calculation of the valuation of its assets that has not yet been agreed upon, must be calculated in detail," Arcandra said.

Mohammad bin Salman

During a visit to Buenos Aires, Argentina at the end of November 2018, Vice President Jusuf Kalla held a bilateral meeting with Crown Prince of Saudi Arabia Mohammad bin Salman on the sidelines of the G-20 Summit. The meeting took place in a bilateral area located at Costa Salguero Center, Buenos Aires.

Jusuf Kalla

Both are committed to strengthening relations between countries, especially in the field of economic investment. In the meeting, Jusuf Kalla said that Saudi Arabia asked the Indonesian Government to accelerate the realization of the construction of an oil refinery in Cilacap, Central Java.

"We have an agreement to build an oil refinery in Cilacap. They ask to be accelerated. The investment is very large, around US $ 56 billion.

IN INDONESIAN

Pertamina & Aramco Bentuk Usaha Patungan

PT Pertamina (Persero) menargetkan pembentukan perusahaan patungan bersama dengan Saudi Aramco untuk proyek revitalisasi Kilang Cilacap di Kabupaten Cilacap, Jawa Tengah dapat terealisasi tahun depan.

Sekretaris Perusahaan Pertamina Syahrial Muchtar menuturkan bahwa rencana revitalisasi (refinery development master plan/RDMP) Kilang Cilacap masih berjalan sesuai dengan rencana dan tidak ada kendala. Perusahaan migas milik Kerajaan Arab Saudi yang menjadi mitra Pertamina dalam revitalisasi Kilang Cilacap itu masih tetap berkomitmen untuk menambah kapasitas kilang itu.

“[Pembentukan perusahaan patungan] pada tahun depan pun harus bisa kami mulai. Semua masih konsisten,” ujarnya, Senin (17/12).

Syahrial menegaskan bahwa kepemilikan saham masing-masing pihak pada perusahaan patungan tidak mengalami perubahan. Dalam perusahaan patungan itu, Pertamina telah menguasai saham 55% dan Aramco 45%. Namun, kedua belah pihak masih menghitung aset dalam proses revitalisasi Kilang Cilacap. Kedua perusahaan itu memiliki perhitungan nilai yang berbeda sehingga belum memperoleh kesepakatan.

“ltu normal. Mereka hitung, kami juga hitung. Ini ketentuannya di angka berapa yang nanti disepakati.”

Sebelumnya, Wakil Menteri Energi dan Sumber Daya Mineral (ESDM) Arcandra Tahar mengakui, saat ini terkait dengan proyek Kilang Cilacap, Pertamina sedang mengevaluasi pembentukan usaha patungan agar dapat memperoleh keuntungan yang sesuai dengan kerangka bisnis.

“Kerangka bisnisnya sudah ada, tetapi misalnya Cilacap, perhitungan valuasi asetnya ini yang belum sepakat, harus dihitung secara detail,” kata Arcandra.

Dalam kunjungan ke Buenos Aires, Argentina pada akhir November 2018, Wakil Presiden Jusuf Kalla melakukan pertemuan bilateral dengan Putra Mahkota Kerajaan Arab Saudi Mohammad bin Salman di sela-sela Konferensi Tingkat Tinggi (KTT) G-20. Pertemuan tersebut berlangsung di area bilateral yang terletak di Costa Salguero Center, Buenos Aires.

Keduanya berkomitmen untuk mempererat hubungan antarnegara, khususnya di bidang investasi ekonomi. Dalam pertemuan tersebut, Jusuf Kalla menyampaikan bahwa Arab Saudi meminta Pemerintah Indonesia untuk dapat mempercepat realisasi pembangunan kilang minyak di Cilacap, Jawa Tengah.

“Kita sudah ada perjanjian untuk bangun kilang minyak di Cilacap. Mereka minta dipercepat. Investasinya sangat besar, sekitar US$ 56 miliar.

Bisnis Indonesia, Page-24, Wednesday, Dec 19, 2018

Next year, the Joint Venture of Cilacap Refinery is Formed

Cilacap's Refinery Development Master Plan (RDMP) project will begin. PT Pertamina (Persero) and Saudi Aramco will soon form a joint venture to develop the Cilacap RDMP refinery project next year.

Saudi Aramco Refinery

PT Pertamina Corporate Secretary Syahrial Mukhtar said that Saudi Aramco as a partner in the Cilacap RDMP project was still consistently building the project with Pertamina. Aramco and Pertamina also target to be able to immediately form a joint venture company.

"We must start next year," he said.

Regarding share ownership in a joint venture, according to Syahrial, there will be no change, Pertamina still holds control of 55% of shares and Saudi Aramco for 45% of the shares. Although currently Pertamina and Saudi Aramco are still in the discussion stage regarding spin-off assets, the two companies have not yet agreed on the calculation of Pertamina's assets in the Cilacap RDMP project.

"That's normal. They count, we also count. This will be found at what number will be agreed upon, "Syahrial said.

Just so you know. The investment value for the Cilacap RDMP project is estimated at US $ 5.5 billion. According to the plan, the capacity of the Cilacap RDMP project will increase to 400,000 barrels per day (blah) with products that meet Euro V specifications, basic petrochemicals, and Group II Base Oil for lubricants.

IN INDONESIAN

Tahun Depan, Joint Venture Kilang Cilacap Terbentuk

Proyek Refinery Development Master Plan (RDMP) Cilacap akan dimulai. PT Pertamina (Persero) dan Saudi Aramco segera membentuk perusahaan patungan (joint venture) terhadap pengembangan proyek kilang RDMP Cilacap tahun depan. 

Corporate Secretary PT Pertamina Syahrial Mukhtar menyebutkan, Saudi Aramco sebagai mitra di proyek RDMP Cilacap masih konsisten membangun proyek tersebut bersama Pertamina. Aramco dan Pertamina pun menargetkan bisa segera membentuk perusahaan patungan.

"Pada tahun depan harus bisa kami mulai," ungkap dia.

Mengenai kepemilikan saham di perusahaan patungan, menurut Syahrial, tidak akan ada perubahan, Pertamina tetap memegang kendali sebanyak 55% saham dan Saudi Aramco sebesar 45% saham. Meski sekarang ini Pertamina dan Saudi Aramco masih dalam tahap pembahasan terkait spin off aset kedua perusahaan belum juga sepakat tentang perhitungan aset Pertamina di proyek RDMP Cilacap. 

“Itu kan normal. Mereka hitung, kami juga hitung. Ini akan ketemu di angka berapa yang nanti disepakati," ujar Syahrial.

Asal tahu saja. Nilai investasi untuk proyek RDMP Cilacap diperkirakan mencapai US$ 5,5 miliar. Menurut rencana, kapasitas proyek RDMP Cilacap akan bertambah menjadi 400.000 barel per hari (blah) dengan hasil produk yang memenuhi spesitikasi Euro V, petrokimia dasar (basic petrochemical), dan Group II Base Oil untuk pelumas.

Kontan, Page-14, Tuesday, Dec 18, 2018

Mega Pertamina Refinery Project to Late

Pertamina wants to overhaul the partnership scheme for the construction of the refinery.

MAP OF REFINERY IN INDONESIA

PT Pertamina ensures the massive construction of crude oil processing facilities can not take place as scheduled. "The project is back a year or two. With a project value above US $ 15-20 billion, it is definitely worth it, "said Pertamina President Director Elia Massa Manik at Parliament Complex, Jakarta.

Massa explained the project backed up because there are some stages that are too risky if done simultaneously. As in the Balikpapan Refinery in East Kalimantan, he requested that the advanced end engineering design document be completed before proceeding to the procurement stage.

Previously, when Dwi Soetjipto was in charge of Pertamina, several processes such as the bankability feasibility study and the basic engineering study were conducted simultaneously.

The policy makes Balikpapan's revitalization target for one of Balikpapan's retreats from 2019 to 2020. The second phase of development also retreats from 2020 to the end of 2021. The first phase of revitalization focuses on increasing refinery capacity from 260 thousand to 360 thousand barrels of oil per day. The second stage is the increase of refinery complexity in order to produce various petrochemical and aromatic products. Pertamina is working on this project worth US $ 5 billion.

The target for the development of the Cilacap refinery, Central Java, also shifted to 2023, or back two years from the original plan. Cilacap is the largest refinery revitalization project that increases oil processing capacity from 300 thousand barrels per day to 400 thousand barrels per day.

The project, with a capital requirement of US $ 5.5 billion, is jointly managed by a joint venture with Saudi Arabian oil giant Saudi Aramco. The revitalization of the Balongan refinery in West Java is also delayed from 2020 to the end of 2021. The mass does not specify whether schedule changes will affect investment costs. Previously, the cost of refinery development reached US $ 1.2 billion or down compared to the original formula of US $ 2.7 billion

Pertamina has not decided on the Dumai refinery development schedule in Riau. Under the initial plan, the refinery can operate with a new capacity of 300,000 barrels per day by 2024. The revised schedule for the new plant in Bontang, East Kalimantan, has not been decided yet. The selection of Pertamina partners is still in the tender process.

The two companies that are strong candidates are Sinopec (China) and Kuwait Petroleum International (Kuwait). Similarly, a new refinery in Tuban-East Java is scheduled to operate backward from 2021 to 2023. The company cooperated with Rosneft, a Russian company, to build a processing facility of 300,000 barrels of oil per day.

Director of Processing and Petrochemistry Megaproject Rachmad Hardadi said the rescheduling operation schedule made Pertamina have to revise the agreement together with partners, namely Aramco and Rosneft. The amendment also relates to Pertamina's proposal to amend the for-take agreement. Under the deal, companies are required to absorb 100 percent of refinery output. These provisions eventually become dependents affecting the company's financial liabilities.

Koran Tempo, Page-21, Thursday, June 8, 2017

Pertamina Accelerates Balikpapan Refinery Expansion

    PT Pertamina is accelerating the implementation of the Refinery Development Master Plant (RDMP) for the Refinery Unit (RU) or Refinery V Balikpapan, East Kalimantan stages I and II in 2019 and 2021.

PT Pertamina

    According to Pertamina's Director of Mega-Processing and Petrochemical Projects, Rachmad Hardadi, this project requires funds of US $ 2.6 billion or IDR 34 trillion. The refinery construction is for long-term investment, said Rachmad. 

    According to Rachmad, the Balikpapan oil refinery production capacity in the first phase of the RDMP project will be increased from 260 thousand barrels to 360 thousand barrels per day. In 2019, the refinery will manufacture fuel oil to the Euro 2 standard.

    The second stage of the RDMP for the production of quality fuel with Euro 4 and Euro 5 standards is expected to materialize in mid-2021.

"In accordance with the needs of the community, the quality of the fuel will be improved. Funds for the development of this refinery come entirely from Pertamina. According to Rachmad, the RDMP RU V Balikpapan project has entered the demolition stage of several warehousing facilities. Pertamina is also building housing in the form of 24-floor apartments for employees. This apartment will be occupied by employees who initially live in the Parikesit housing estate, Balikpapan. However, they will be evicted into warehouses and workshops, ”.

Fadel Muhammad

    Deputy Chairman of the Energy Commission of the House of Representatives, Fadel Muhammad, stated that it is time for Indonesia to become independent in producing fuel for domestic needs. According to him, local workers are capable of producing international standard fuel. 

Saudi Aramco

    Pertamina will partner with foreign companies, such as TX Nippon Oil and Energy and Saudi Aramco. However, it was decided that Pertamina would implement it only.

Koran Tempo, Page-9, Monday, Oct 24, 2016