Indonesia’s state-owned energy firm PT Pertamina is forging joint ventures with global oil & gas global players, Saudi Aramco and Japan JX Nippon, to build two refineries at an investment $10 billion.
Speaking at a press conference, CEO Dwi Sutjipto said, Pertamina will hold the controlling stake in both the projects.
In Balikpapan refinery project, Pertamina will own 70% while JX Nippon will take 30 per cent. And, for Cilacap refinery, for which negotiations are currently on, he said, Pertamina could own up to 60 per cent, while the Saudi firm will take the rest.
They will have a total capacity 200,000 barrels oil per day (BOPD).
Pertamina director Rachmat Hadardi added that the head of agreement (HoA) of the two projects will be signed in November. The project, which is expected to kick off the ground in December, is estimated to start commercial production by 2021.
Finance director Arif Budiman said the project will be financed through internal cash flow and project finance. Currently, he said, Pertamina has invited foreign and local bankers to help with project finance.
The company plans to invest around $4.42 billion this year and 75% of the total investment will be distributed for upstream business. Dwi said, the company plans to double its oil production to 1.6 million BOPD by 2019 to meet the market demand and cut imports.
Upstream director Syamsu Alam said, until September, Pertamina has produced 282.14 million barrel oil per day (MBOEPD) and gas production reached 1.9 billion square-feed per day (BSCFD).
In January to September, Pertamina has invested $2.5 billion of which $1.9 billion was earmarked for upstream projects and $600 million in downstream projects such as geothermal projects.
Dwi said Pertamina is targeting the contribution of upstream business to reach 50% of the total revenues from 20 per cent earlier. Pertamina is also targeting to develop $25-billion expansion in Indonesia until 2025.