Pertamina, Rosneft Establish JV for Petrochemical Complex

State-owned oil and gas firm Pertamina and Russia's Rosneft oil company signed a document to establish a joint venture: PT Pertamina Rosneft Processing and Petrochemicals (PRPP). The two companies agreed to share 55 percent of PRPP`s stocks with Pertamina and 45 percent with Rosneft.

According to a local press release on Tuesday, the document was inked at the Office of the Investment Coordinating Board (BKPM) in Jakarta on Tuesday. The joint venture will build and operate a new oil refinery to be integrated with the new grass root refinery (NGRR) and petrochemical complex in Tuban District, East Java Province.

Deputy for Investment Services of the BKPM Lestari Indah explained that the board strongly supported the establishment of the Indonesian legal entity on behalf of PT PRPP of Pertamina and Rosneft.

"The establishment of PT PRPP in the oil refinery business will help to generate up to 40 thousand jobs as part of the implementation of the National Strategic Project that is expected to balance the demand and supply of oil and gas and to have a positive impact on Indonesia`s economic growth," Indah said.

Indah admitted that the Indonesian government, through the BKPM, is tasked with ensuring that the establishment of PT PRPP, through the three-hour investment service mechanism, is implemented optimally and becomes immediately operational as an Indonesian legal entity.