Rosneft, Pertamina Poised for Indonesian Refinery Deal

Rosneft, Russia's largest oil producer, and Indonesia's Pertamina will sign a framework agreement later this week on an oil refinery in Indonesia, Russian presidential aide Yuri Ushakov told reporters on Tuesday.

He did not elaborate. Pertamina has been looking for a development partner for the $12 billion Tuban refinery project.

The deal is expected to be signed in the Russian Black Sea resort of Sochi, on the sidelines of a conference there.

Last month, Rosneft said it had discussed Pertamina's possible participation as a shareholder in Rosneft's upstream projects in Russia. Both companies have also considered Rosneft's possible participation in downstream projects in Indonesia.

Rosneft head Igor Sechin has said Rosneft is interested in creating a regional energy hub in Indonesia, according to a company statement.

Indonesia's fuel output has been hit by a lack of investment in its refining sector since the last refinery was completed in 1994. Pertamina currently has 1 million barrels per day (bpd) in refining capacity, which it plans to raise to 2.3 million bpd through upgrades and additional plants.

The new Tuban refinery, which will eventually be integrated with the TPPI petrochemical refinery that Pertamina took over in late 2015, will have a crude processing capacity of 300,000 bpd and is targeted for completion in 2021.

Reporting by Denis Dyomkin