Pertamina to seek majority stake in refinery joint venture with Russia’s Rosneft

Indonesia’s state-owned PT Pertamina hopes to take a majority stake in its joint venture refinery with Russia’s OAO Rosneft. To be located in eastern Java, the proposed refinery will have a capacity of 320,000 barrels per day and will require USD 13-14 billion in investments.

Russia will supply the proposed refinery’s crude oil requirements. The deal could include Pertamina taking a minority stake in some Russian oil fields.

A non-binding agreement to advance the partnership is expected to be announced on May 26. Should the deal push through, this would represent the largest Russian investment in Indonesia. In the past two years, Russian companies have invested a total of about USD 4 million in Indonesia, according to Indonesian government figures.

Indonesian Trade Minister Tom Lembong said the “potential partnership” is in line with a strategy to diversify international trade.

“Sourcing more of our petroleum from Russia reduces any potential over-dependence on crude oil from the Middle East,” Lembong was quoted by The Wall Street Journal as saying.