Jakarta – The Indonesian government is targeting to optimise 13 million barrels of crude oil to be processed at domestic refineries as part of a strategy to increase national energy independence, in line with President Prabowo Subianto’s directive to reduce dependence on fuel oil imports and increase efficiency in the downstream oil and gas sector.
“We have decided that the country’s share of crude oil that has been exported will be fully diverted to domestic refineries,” Minister of Energy and Mineral Resources Bahlil Lahadalia said in an official statement on Monday, January 27.
According to him, this policy also applies to the contractor’s share of crude oil, which was previously considered not to meet specifications.
Bahlil explained that the government is committed to optimising the potential of domestic crude oil to meet refinery needs. “Our refineries, such as those in Balikpapan, Cilacap and Dumai, already have the flexibility to process crude oil with various specifications. So, there is no reason to export crude oil on a large scale,” he said.
Increasing domestic refinery capacity
In support of this policy, the government is accelerating the modernisation and construction of oil refineries. The Balikpapan refinery is now capable of processing crude oil with various specifications. In contrast, the Tuban and Balongan refinery development projects are being accelerated to increase processing capacity in the coming years.
“With the construction of new refineries and modernisation of existing ones, Indonesia will have greater processing capacity to meet national fuel needs,” Bahlil added.
Based on data from the Ministry of Energy and Mineral Resources, this year it is estimated that crude oil exports will reach 28 million barrels. The government targets 12-13 million barrels to be allocated for domestic refinery needs. This will have a significant impact in reducing fuel imports and increasing the efficiency of domestic production.
To ensure the implementation of this policy runs smoothly, the Ministry of Energy and Mineral Resources has asked the Upstream Oil and Gas Special Task Force (SKK Migas), Cooperation Contractors (KKKS), and PT Pertamina (Persero) to collaborate.
“We ask SKK Migas and KKKS to ensure that domestic refineries can utilise the crude oil produced by blending or modifying the required specifications,” Bahlil said.
He continued that this step also aims to increase domestic crude oil’s added value while reducing the energy sector’s trade balance deficit.
“The President’s direction is clear: domestic crude oil must provide maximum benefits in the country. This is not only about reducing imports but also strengthening our energy industry as a whole,” Bahlil said.
Commitment to reduce fuel imports
In addition to optimising the use of domestic crude oil, the government also targets a gradual reduction in fuel imports through increased production and refinery efficiency. With the increasing processing capacity, Indonesia is expected to be able to meet its energy needs independently in the next few years.
“This is a big step towards energy self-sufficiency. The government is improving existing refineries and building new ones to ensure long-term energy security,” Bahlil concluded.
The government’s move has received support from various parties, including oil and gas industry players. With the synergy between the government, SOEs, and the private sector, it is hoped that diverting crude oil to domestic refineries can be a strategic solution in realising energy independence and strengthening the national oil and gas sector. (Hartatik)
