Jakarta. Investment Minister Bahlil Lahadalia recently denied rumors of Russian oil giant Rosneft pulling out of a refinery project in Tuban, East Java, saying that the company only sought to change the existing agreement.

Rosneft had partnered with state-run oil firm Pertamina to run the Tuban grass root refinery project under a joint venture scheme.

 A grassroots refinery means that Pertamina and Rosneft will build the refinery from scratch. However, the protracted Russia-Ukraine war has put the plan in limbo. Western nations have imposed sanctions against Russian companies in Ukraine, thus affecting Moscow’s investment overseas. Bahlil said Monday that the war had also prompted Rosneft to renegotiate the deal, although the minister did not say which terms the company wanted to change.

“Back then, there were some issues related to the land, but we already took care of it. … In the implementation process, the Russia-Ukraine war happened. … And now, we are currently looking for a way out to make sure that this project can run,” Bahlil told the press in Jakarta.

“But no, it is not that they [Rosneft] are quitting this [Tuban] project. It is just that Rosneft is renegotiating the deal because there are some geopolitical uncertainties,” he said.

Rosneft and Pertamina established a joint venture partnership in 2017 with the Indonesian oil company owning 55 percent of the shares. The government granted a “strategic national project” status to the Tuban refinery, meaning that it can enjoy an easier licensing process and less bureaucratic red tape, among others. Pertamina-Rosneft claims that this refinery, which will produce both fuel oil and petrochemicals, can help Indonesia unlock energy self-sufficiency.

A few years ago, the refinery made headlines due to land-clearing issues. The locals eventually sold their land to Pertamina for this Tuban refinery, thus turning the nearby villages into a “kampong of billionaires” as many people bought cars using the compensation money.

Bahlil admitted that there were already other potential investment partners for the Tuban project, although Rosneft still remained the top choice. He added: “Yes, there are alternatives, but we are still sticking to Rosneft.”

Pertamina earlier this year revealed that they would likely announce the final investment decision for the Tuban project by early 2025.