Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said the government is opening the opportunity for new foreign investors to invest in the Tuban Grass Root Refinery (GRR) project if Russia’s Rosneft Oil Co PJSC fails to provide clarity on its commitment to the venture.
The refinery project, which involves PT Kilang Pertamina Internasional (KPI) and Rosneft, has faced setbacks partly due to geopolitical issues.
“For concession holders on certain working areas, if there is no progress in certain time frame based on the regulation, there is a posibility that we will open bidding for new investors. Because it is state project, it is forbidden to slow the process,” Bahlil said on Friday, November 29, 2024.
He added, however, that the government did not close the opportunity for the Russian company to continue with the project. He cited that he has met with Pertamina CEO, but they have not discussed the issue in detail.
“I have set the agenda by the end of November, but Indonesia has just finished the regional elections. As chairman of a political party, I have made it clear that regional election is the first priority,” he said.
The Tuban refinery, valued at approximately US$3.8 billion (Rp54.2 trillion), is designed to process 300,000 barrels of crude oil per day and produce around 30 million liters of fuel daily, including gasoline and diesel.
The project has already encountered obstacles, including land acquisition, incentives, and permits, which Bahlil helped address during his tenure as Minister of Investment.
Currently, PT KPI, a subsidiary of State energy compny PT Pertamina, continues to collaborate with Rosneft through PT Pertamina Rosneft Pengolahan dan Petrokimia (PRPP) to progress the project.
Hermansyah of KPI confirmed that the Final Investment Decision (FID) is expected to be completed by the foiurth quarter of 2024, expediting the timeline initially set for 2025.
As one of Indonesia’s largest oil refinery projects, the Tuban GRR aims to bolster domestic fuel production capacity, enhancing energy security and reducing dependence on imports.
