Govt Adopts Government-SEO Cooperation Scheme for Bontang Refinery Project
Date 9 Februari 2016
The Government has decided to adopt the scheme of Government business entity cooperation (KPBU) for the oil refinery project in Bontang, East Kalimantan.
The legal base for this decision is the Presidential Regulation Number 75 of 2014 on the Acceleration of the Provision of Priority Infrastructures and Presidential Regulation Number 38 of 2015 on the Government business entity cooperation in the Provision of Infrastructures.
The decision was made during a coordinating meeting held at the office of the Coordinating Ministry for the Economy on the follow up of the construction of the oil refinery in Bontang.
The coordinating meeting was led by Coordinating Minister for the Economy Darmin Nasution and was attended by Minister of Energy and Mineral Resources Sudirman Said as well as Echelon I officials from the Coordinating Ministry for Maritime Affairs, Ministry of Finance, Ministry of State-owned Enterprises, Ministry of Spatial Planning and State-owned Oil and Gas Company PT Pertamina.
The outline business case (OBC) report that serves as the base of the KPBU scheme has been completed and the report also contains all requirements that are needed.
Another decision made during the meeting is the approval of Bontangs detailed spatial planning (RDTR). The approval is needed to settle land certification for the remaining 300 hectares.
The RTDR is also needed to decide on the location of the oil refinery by Governor of East Kalimantan Province. Deciding on the location is one of the requirements so that the auction for the KPBU scheme can be carried out.
The third decision is on the international consultant of the Badan Usaha Pendamping (transaction advisor) in which the responsibility lies at the Ministry of Finance.
The oil refinery in Bontang was declared as a National Strategic Project under the Presidential Regulation Number 4 of 2016 and the list of Priority Projects under the regulation of the Coordinating Minister for the Economy Number 12 of 2015.
Investment value of the refinery amounting to Rp. 75 140 trillion and the construction is scheduled to begin in 2018 and is expected to operate in 2022. The oil refinery is projected to produce 235,000 barrels per day. (Ekon/ES)