ROSNEFT & PERTAMINA AGREEMENT
ROSNEFT wrote, Rosneft and Pertamina signed within the working visit of Rosneft's Chief executive officer Igor Sechin to Indonesia a number of documents aimed at further development of cooperation between the companies. The agreements reached cover all key areas of their business activities.
Refining, Petrochemical and Trading
Rosneft and Pertamina signed an Agreement envisaging the creation of a Joint Venture (JV) with the scope of implementing the project for the construction of the Tuban refining and petrochemical complex to be located in the eastern part of Java (Indonesia).
The design capacity of primary processing at the Tuban complex is planned to stand at 15 million MTA. It will run on imported medium and heavy grades of sour crude. The project provides for the construction of a large fuel oil catalytic cracker and a petrochemical complex. The complex is assumed to be able to accommodate VLCC supertankers with deadweight of up to 300 thousand tonnes.
The document specifies the allocation of equity stakes between JV participants (Rosneft – 45%, Pertamina – 55%), JV management and joint activity funding principles, and further steps for the project implementation.
The parties are currently developing a feasibility study (FS) of the project. The final investment decision on the project will be made upon the results of the feasibility study, basic engineering design (BED) and front end engineering design (FEED).
Additionally, the Joint Venture Agreement describes key terms of hydrocarbons supplies by Rosneft to the JV, and the principles of marketing the products to be produced at JV facilities.
The establishment of the Joint Venture marks a new phase in the development of a modern refining and petrochemical complex in Indonesia. The project is an important part of Rosneft strategy aimed at achieving a stronger presence in the oil products market of the Asia-Pacific Region.
Exploration and Production
Rosneft and Pertamina laid the foundation for cooperation in the area of joint development of offshore fields. The companies signed a Memorandum of understanding for cooperation in respect of the Northern Tip of Chayvo Field (Sakhalin Island).
Pursuant to the signed document, the parties intend to agree legally binding documents for the acquisition by Pertamina of up to a 20% share stake in the project.
The participation of Pertamina in a production project in the territory of the Russian Federation will strengthen long-term relations between the Russian Federation and Indonesia, and will become a basis for future implementation of joint projects between the companies in Russia.
Furthermore, the parties are considering the possibility of setting up a joint venture for the development of a Rosneft onshore project. The companies signed a Memorandum of Understanding for cooperation in respect of Russkoye field.
The document assumes that Petramina will enter the project with a stake of up to 37.5%, and sets forth a procedure for establishing a joint venture by the parties, including the signing of required legally binding agreements in the near term.
Implementation of the project will allow Rosneft to acquire a new international partner for developing a capital intensive project in Russia. Rosneft will carry out operational control of the proposed joint venture.
Within the working visit the potential participation of Inter RAO in the development of the Indonesian energy infrastructure and generation was also discussed.
Commenting on the agreements reached, Igor Sechin said, «The signed documents cover key business dimensions of our companies, demonstrating an integral cooperation between Rosneft and Pertamina. The reached arrangements present an outstanding example of a high quality business dialog between the two world energy leaders. I am confident that we will keep up the pace of the development of our partnership for the benefit of our companies and both countries».
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