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Jakarta Post

Pertamina halts plan to acquire Russian fields

  • Viriya P. Singgih

    The Jakarta Post

Jakarta   /   Fri, August 18 2017   /  12:23 am

State-owned energy company Pertamina is finding it difficult to acquire two energy blocks controlled by Russian oil firm Rosneft because of the high acquisition tax the firm has to pay to Indonesian authorities to clinch the deal.Pertamina will team up with Rosneft to develop the new US$15 billion Tuban refinery in East Java. It is projected that the refinery will process 300,000 barrels of oil per day (bopd) once it is completed in 2024.As part of this partnership, Pertamina has also been looking to acquire a 37.5 percent participating interest in the onshore Russkoye field and a 20 percent interest in the offshore Northern Chayvo field in Russia.However, Pertamina’s upstream director, Syamsu Alam, said the company was required to pay a high acquisition tax to the Indonesian government for these two fields, which made the acquisition plan economically unfeasible.“We...