Jakarta—Minister of Investment Bahlil Lahadalia stated that Indonesia spends up to IDR 500 trillion in foreign exchange each year just to meet the needs of crude oil imports, and the government must immediately take concrete steps to reduce this dependence and increase national oil production. According to him, this step can be started by re-optimising oil wells that have not been operating.
At the Repnas National Conference & Awarding Night on Monday, October 14, Bahlil explained that the recent decline in Indonesia’s oil production has forced the country to increase imports to meet domestic energy needs. “We must find solutions for energy sovereignty. One of them is to reduce import dependence through increased domestic production,” Bahlil said.
Bahlil outlined three main steps that can be taken to increase lifting or national oil production. The first step, according to him, is to reactivate oil wells that are currently unused or idle. Based on data from the Ministry of Energy and Mineral Resources (ESDM), Indonesia has around 44,900 oil wells, with 16,600 in idle condition. Of these, an estimated 5,000 wells have the potential to be optimized to boost domestic oil production.
In addition, Bahlil also mentioned that existing active wells need to be intervened with the latest technology to increase their production capacity.
“We can increase the capacity of active wells with the right technology. We need to accelerate innovation in this sector to compete with other countries,” he added.
The third step suggested is to accelerate the exploration of new wells, especially in eastern Indonesia, which is rich in oil potential. Although it requires high costs and fast time, Bahlil emphasised that this step needs to be taken.
Reducing regulations to attract investors
In addition, Bahlil said that his party is cutting regulations to speed up the exploration process. From around 320 permits that previously had to be taken, only 140 are still valid. In the future, this number will be trimmed again to make it more efficient.
In line with efforts to reduce dependence on oil imports, Bahlil highlighted the importance of energy transition to new and renewable energy. With the support of President-elect Prabowo Subianto, the Indonesian government is now encouraging the use of electric vehicles to reduce the use of fossil fuels.
“If we can increase the adoption of electric vehicles, we can reduce our dependence on petroleum, which is also part of our energy sovereignty,” Bahlil said.
Bahlil expressed optimism that increased domestic oil production and reduced fossil energy consumption through electric vehicles could significantly reduce Indonesia’s dependence on energy imports.
Bahlil highlighted that Indonesia had been in an energy surplus in the past, precisely in 1996-1997, when national oil production reached 1 million barrels per day. However, production has now dropped to around 600,000 barrels per day, while the demand reaches 1 million. This requires Indonesia to import around 900,000 to 1 million barrels of oil daily.
By optimising existing oil wells, adopting new technologies, and simplifying regulations, Bahlil hopes that Indonesia can strengthen domestic energy production and reduce dependence on imports. He believes this is an important step to ensure Indonesia’s energy sovereignty in the future. (Hartatik)
