State oil and gas company Pertamina is currently looking for strategic partners and investors to develop the Grass Root Refinery (GRR) project in Bontang, East Kalimantan. The refinery is expected to be fully operational by 2023 at the latest.

The GRR Bontang project that needs an investment of at least US$12 billion is expected to refine 300,000 barrels of crude oil per day. The project development is a follow-up of Energy and Mineral Resources Ministry’s Decision No. 7935/ K/10/MEM/2016 issued in December 2016 on the appointment of Pertamina as the operator of the oil refinery in Bontang.

“Through this project, Pertamina is expected to support President Joko “Jokowi” Widodo’s Nine Priority (Nawacita) programs, in a bid to improve the energy resiliency program and to reduce fuel imports,” Pertamina’s Mega Project Refinery & Petrochemical director said in a press release on Wednesday, February 22, 2017.

Pertamina has scheduled a project expose on February 28, 2017, in relation to the partnership plan. At the occasion, Pertamina will reveal the preliminary plan for the project development, the project profile, and the initial concept of the business structure and model to be implemented. Interested investors are welcomed to register by February 24, 2017, at the latest by sending an email to grrbontang@pertamina.com.

Rachmad revealed that Pertamina is expecting a consortium consisting of oil and gas companies, traders, lenders, and local and international investors led by an oil and gas company as the strategic partner. Due to the need of a huge amount of investment, Rachmad said that foreign investors cannot be avoided.

However, Pertamina hopes that local investors will take part in the consortium. For the first stage, Pertamina planned to set a 5-25 percent ownership with a right or option to increase the ownership in a period to be agreed later.

Rachmad added that the consortium is also expected to be involved in crude oil or raw materials procurements and prepare the funding. In addition, the partner is also expected to be able to market unabsorbed domestic products by exporting them to Australia, Papua New Guinea, New Zealand, and the Philippines.

From the business perspective, Rachmad said that the partner must have positive achievements. “It doesn’t have to be a public company. It is easy to track its operational experience and achievements,” he explained.

source: tempo.co