Indonesia’s state-owned energy firm PT Pertamina is forging joint ventures with Saudi Aramco and Japan JX Nippon, to build two refineries at an investment $10bn.
Speaking at a press conference, CEO Dwi Sutjipto said Pertamina will hold the controlling stake in both the projects.
In the Balikpapan refinery project, Pertamina will own 70% while JX Nippon will take the remaining 30%.
With regards to the Cilacap refinery, for which negotiations are currently on, he said, Pertamina could own up to 60%, while Saudi Aramco will take the rest.
The two refineries are expected to have a total capacity 200,000 barrels oil per day (bpd).
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 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 $4.42bn 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 1.6mn bpd by 2019 to meet the market demand and cut imports.
Upstream director Syamsu Alam said, until September, Pertamina has produced 282.14 million bpd and gas production reached 1.9bn square feet per day.
In January to September, Pertamina has invested $2.5bn, of which $1.9bn was earmarked for upstream projects and $600mn 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% earlier. Pertamina is also planning expansion projects in Indonesia worth $25bn until 2025.
