Indonesia’s Pertamina said on Aug. 16 that tax issues related to importing crude oil into the Southeast Asian country could scupper plans by the state oil firm to take stakes in two energy blocks controlled by Russia’s Rosneft.

In October 2016, Rosneft said that Pertamina could get up to 20% in the offshore Northern Chayvo project offshore Russia’s Pacific island of Sakhalin and up to 37.5% in the onshore Russkoye Field in Siberia. The proposal came after the two companies agreed a refinery joint venture in Indonesia to be located in Tuban on the island of Java.

“The economic viability does not work for us if you take into account the tax issue,” said Syamsu Alam, director of upstream operations at Pertamina.

It was still unclear what tax would need to be paid on the crude imports.

Alam said that it had informed Rosneft it was having difficult closing the deal and understood that the stakes were being offered to others buyers.