Indonesia plans to build several oil refineries in different locations with a total production capacity of one million barrels per day (bpd), a significant increase from the original plan of 500,000 bpd.
The decision was made during a closed-door meeting chaired by President Prabowo Subianto on Monday (March 10) as part of efforts to reduce dependence on fuel imports, which currently stand at about one million bpd.
Energy Minister Bahlil Lahadalia said the new refineries would be designed as petrochemical complexes and spread across different locations to ensure equitable distribution.
The refinery development project is part of 21 downstream initiatives in the initial phase with a total investment of $40 billion. Part of the funding will be supported by the Daya Anagata Nusantara Investment Management Agency (BPI Danantara). In addition, these projects are an integral part of the downstream sector's investment target of $618 billion by 2025.
The government also plans to build an additional oil storage facility on Nipah Island, Riau Islands, to enhance national energy security.
In addition to expanding oil refineries, the government is also committed to developing alternative energy sources such as dimethyl ether (DME) as a substitute for LPG.
New Oil Refineries Across Indonesia
On a separate occasion, Deputy Minister of Energy and Mineral Resources Yuliot Tanjung announced that new oil refineries will be built on major islands such as Sumatra, Kalimantan and Sulawesi, with the possibility of expansion to eastern Indonesia. He made the statement at the Ministry of Energy and Mineral Resources building on March 12.
However, no official details on the capacity of each refinery have been released as the project is still in the consolidation phase and will be adjusted based on economic scale.
Yuliot added that the increase in refining capacity will be accompanied by increased oil exploration efforts. This initiative is aimed at ensuring a sufficient supply of crude oil to support the operations of the new refineries.
In terms of investment, calculations are still being made under government guidelines, taking into account integration with existing oil storage infrastructure, such as the facility on Pemping Island.
To achieve this goal, the Ministry of Energy and Mineral Resources is also accelerating the bidding and auction process for new oil and gas working areas to boost domestic exploration and production. This strategic move is expected to reduce crude oil imports despite the increase in refining capacity.
In recent years, Indonesia has consistently worked to maximize domestic resource processing as part of a long-term strategy to strengthen national energy security.
