Pertamina is seeking government approval to divest assets to help shield it from rising crude oil prices and a rupiah that is at its lowest level in more than two and a half years. (Reuters Photo/Darren Whiteside)

Pertamina to Delay Some Refinery Projects Over Financing


JUNE 07, 2017

Jakarta. Pertamina plans to delay some refinery upgrades and a new project, including ventures involving Rosneft and Saudi Aramco, due to financing issues, the state oil company said on Tuesday (06/06).

The delays will mean that Indonesia, which is one of Southeast Asia's biggest fuel importers, may have to ship in more oil products than previously planned over the next decade.

Rachmad Hardadi, director of megaprojects and petrochemicals at Pertamina, told reporters the timing of the targeted completions had been pushed back to ensure that "the cost is not a burden over the same [one or two] years."

He said readjustments were needed so the projects fit with upstream acquisitions and infrastructure requirements.

Hardadi said the completion of stage one of the Balikpapan project, which is to boost the refinery's capacity to 360,000 barrels per day (bpd) from 260,000 bpd, would be pushed back to 2020 from 2019. Stage two, aimed at improving fuel quality, would be delayed to 2021, he said.

Pertamina was awaiting a green light from the board of partner Saudi Aramco for its plan to delay the completion of the $5 billion upgrade of the 348,000 bpd capacity Cilacap refinery in Central Java to 400,000 bpd to 2023 from 2021, he said.

Pertamina also planned to discuss with its partner Rosneft on Wednesday delaying the completion of the new Tuban refinery project to 2023-2024 from 2021, Hardadi said.

The new Tuban refinery, which will eventually be integrated with the TPPI petrochemical refinery that Pertamina took over in late 2015, will have a crude processing capacity of 300,000 bpd.