Rosneft and Pertamina Develop Cooperation
Rosneft and Pertamina signed within the working visit of Rosneft’s Chief executive officer Igor Sechin to Indonesia a number of documents aimed at further development of cooperation between the companies. The agreements reached cover all key areas of their business activities.
Refining, Petrochemical and Trading
Rosneft and Pertamina signed an Agreement envisaging the creation of a Joint Venture (JV) with the scope of implementing the project for the construction of the Tuban refining and petrochemical complex to be located in the eastern part of Java (Indonesia).
The design capacity of primary processing at the Tuban complex is planned to stand at 15 million MTA. It will run on imported medium and heavy grades of sour crude. The project provides for the construction of a large fuel oil catalytic cracker and a petrochemical complex. The complex is assumed to be able to accommodate VLCC supertankers with deadweight of up to 300 thousand tonnes.
The document specifies the allocation of equity stakes between JV participants (Rosneft – 45%, Pertamina – 55%), JV management and joint activity funding principles, and further steps for the project implementation.
The parties are currently developing a feasibility study (FS) of the project. The final investment decision on the project will be made upon the results of the feasibility study, basic engineering design (BED) and front end engineering design (FEED).
Additionally, the Joint Venture Agreement describes key terms of hydrocarbons supplies by Rosneft to the JV, and the principles of marketing the products to be produced at JV facilities.
The establishment of the Joint Venture marks a new phase in the development of a modern refining and petrochemical complex in Indonesia. The project is an important part of Rosneft strategy aimed at achieving a stronger presence in the oil products market of the Asia-Pacific Region.
Exploration and Production
Rosneft and Pertamina laid the foundation for cooperation in the area of joint development of offshore fields. The companies signed a Memorandum of understanding for cooperation in respect of the Northern Tip of Chayvo Field (Sakhalin Island).
Pursuant to the signed document, the parties intend to agree legally binding documents for the acquisition by Pertamina of up to a 20% share stake in the project.
The participation of Pertamina in a production project in the territory of the Russian Federation will strengthen long-term relations between the Russian Federation and Indonesia, and will become a basis for future implementation of joint projects between the companies in Russia.
Furthermore, the parties are considering the possibility of setting up a joint venture for the development of a Rosneft onshore project. The companies signed a Memorandum of Understanding for cooperation in respect of Russkoye field.
The document assumes that Petramina will enter the project with a stake of up to 37.5%, and sets forth a procedure for establishing a joint venture by the parties, including the signing of required legally binding agreements in the near term.
Implementation of the project will allow Rosneft to acquire a new international partner for developing a capital intensive project in Russia. Rosneft will carry out operational control of the proposed joint venture.
Within the working visit the potential participation of Inter RAO in the development of the Indonesian energy infrastructure and generation was also discussed.
Commenting on the agreements reached, Igor Sechin said, «The signed documents cover key business dimensions of our companies, demonstrating an integral cooperation between Rosneft and Pertamina. The reached arrangements present an outstanding example of a high quality business dialog between the two world energy leaders. I am confident that we will keep up the pace of the development of our partnership for the benefit of our companies and both countries».
Not for editors:
On 26 Мay, 2016, Rosneft and Pertamina signed a framework cooperation agreement, that envisages a study into the prospects for joint projects in the field of crude and product supplies, logistics and infrastructure, an opportunity for Pertamina to step in as a shareholder in Rosneft's Upstream projects in Russia, and partnership in international joint projects for oil refining.
Within July-September 2016, Rosneft Trading SA (Rosneft Group Subsidiary) deliver gasoline to the Asia-Pacific Region. The cargo was delivered to the Indonesian state-owned oil and gas company Pertamina under the contract signed by the parties in June 2016. The contract envisages Rosneft’s participation in monthly tenders for volumes of up to 40 thousand tonnes.
Indonesia is one of the most promising and rapidly growing economies of the region. At the same time, the country is a net importer of motor fuel and petrochemical products. Implementation of the Agreement will make it possible to expand the footprint of Rosneft on the Indonesian energy market, to strengthen the status of the Russian company as a reliable partner in oil and gas production and refining projects in the Asia-Pacific Region, as well as to form a basis for development of new joint projects in Russia and third countries.
Rosneft Information Division
Tеl.: + 7 (499) 517-88-97
October 04, 2016
These materials contain statements about future events and expectations that are forward-looking in nature. Any statement in these materials that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements expressed or implied by such forward-looking statements to differ. We assume no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.