The refinery project will come up at Tuban, East Java and the companies target to complete the construction of the project by the end of 2021.
Rosneft Chairman of the Management Board Igor Sechin noted: "We welcome the signing of the agreement. The geographical location of Indonesia, at a crossroad between two oceans, the Pacific and Indian, opens for the country the way for turning into a global transportation and energy hub which could become a critical point for global economic growth.
"It is obvious that accomplishment of such a global task cannot be achieved without ensuring stable development of the national economy and its uninterrupted supply with energy and fuel resources. In this regard the establishment of partnership relations with Pertamina is the logical development of expanding Rosneft activities in the Asia Pacific Region."
Pertamina president director Dwi Soetjipto was quoted by Bloomberg as saying that the two companies could spend $12bn to $13bn in the refinery project that will come up at Tuban, East Java.
Soetjipto said that Pertamina may take at least 55% stake in the refinery.
Rosneft will own the remaining stake in the refinery that will be capable of processing 320,000 barrels of oil a day.
Rosneft said that it had led the competition for a share in the Tuban complex, launched by Pertamina.
A final decision on the shareholding in the project after the results of a feasibility study, basic engineering design (BED) and front-end engineering design (FEED), Rosneft said.
Rosneft said the implementation of conditions in the agreement will allow the company to expand its presence in the Indonesian energy market and strengthen its position as a reliable partner in oil and gas production and refining projects in the Asia Pacific Region.
The agreement envisages a study to identify the potential for Pertamina to enter in Rosneft’s upstream projects in Russia as an equity holder, and partnership in international joint projects for oil refining.
Image: Rosneft headquarters, Moscow. Photo courtesy of Rosneft.
