Jakarta (Indonesia Window) - A joint project valuation between Indonesia’s state oil/gas company Pertamina and its Saudi counterpart Aramco on the development of an oil refinery in Cilacap, Central Java, is expected to be completed by the end of 2019.

"We are trying to have an agreement this year," Minister of State Owned Enterprises Erick Thohir said here on Tuesday (Oct 29),  the Government News Network reported as quoted by Indonesia Window here on Wednesday.

According to the minister, the matter had also been discussed in a meeting with Minister of Energy and Mineral Resources Arifin Tasrif.

The agreement between Pertamina and Aramco is expected to be reached as the implementation of the project in Cilacap has been delayed for five years.

However, Erick said at present there has been no change in strategy and cooperation will continue.

He pointed out that currently the two parties are still waiting for the valuation results.

Previously, Pertamina and Aramco had agreed to involve a reputable financial advisor as the third valuator in completing the process of valuation and cooperation scheme.

"We will see until December. Whether or not we will agree. If not, we are looking for other alternatives but we are trying to have what has been agreed by both countries," Erick said.

The cooperation between Pertamina and Saudi Aramco in Cilacap, which was initiated in 2014, has not yet proceeded because of differences in valuations from both parties.

The joint venture development agreement between Pertamina and Saudi Aramco was extended from June 2019 to September 2019.

The development of the Cilacap refinery is part of six refinery development master plans and a new grass root refinery (NGRR) to increase Pertamina's fuel oil production capacity from around one million barrels at present to two million barrels per day.

Reporting by Indonesia Window