UAE explores investment for Balikpapan refinery development

Jakarta (ANTARA) - Indonesia's state oil and gas firm Pertamina and the United Arab Emirates' investment company Mubadala entered a refinery investment principle agreement to tap investment cooperation opportunities in developing the Balikpapan refinery in East Kalimantan.

The agreement is expected to unveil a lucid structure for joint investment to ascertain the expedited realization of the refinery development master plan (RDMP) RU V Balikpapan.

Pertamina President Director Nicke Widyawati and Mubadala CEO for Petroleum & Petrochemicals Musabbeh Al Kaabi signed the agreement in the presence of Indonesian President Joko Widodo and Abu Dhabi Crown Prince and Vice Chief of the UAE Armed Forces Syaikh Mohamed bin Zayed Al Nahyan in Abu Dhabi, according to a written information received by Antara on Wednesday.

Widyawati said the inking of the agreement mirrored the commitment of Pertamina and Mubadala, as one of the investors keen on realizing the RDMP Balikpapan.

The inking of the principle agreement is aimed at serving as a follow up on the partnership process towards the phase of due diligence and negotiation, she noted.

"This demonstrates the commitment of both sides to strike a business agreement to accelerate the realization of RDMP Balikpapan as mandated by the government to Pertamina," she expounded.

Pertamina is seeking equity investors to join in the realization of RDMP RU V Balikpapan. The process kicked off in May 2019 by issuing a project teaser to potential investors comprising international oil and gas companies, commercial firms, and financial investors, she stated.

"After the project teaser was issued, several investors have sent a letter of intent to Pertamina. Pertamina will later conduct project sounding and arrange a visit to the Balikpapan refinery for interested investors," she noted.

To realize the RDMP Balikpapan, the project seeks financial investors since the project has entered the construction phase and has had a tolling scheme in place.

In this context, Mubadala is one of the financial investors that has met Pertamina's set criteria. Furthermore, Mubadala, being technically competent, is expected to assist Pertamina in project management.

Source: Antara News

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