Indonesia is increasing the capacity of its upcoming refineries to 1 million barrels per day (bpd), a move aimed at enhancing the country’s energy security and expanding its downstream industry.
The Southeast Asian nation’s energy minister, Bahlil Lahadalia, announced this week that Indonesia plans to build several refineries, including facilities on the islands of Kalimantan and Sulawesi. The new total refinery capacity will be double the 500,000 bpd originally planned.
Currently, Indonesia imports about 1 million bpd of crude oil and fuel to meet domestic demand, according to the minister, as reported by Reuters.
Last week, Lahadalia revealed plans for a $12.5 billion refinery project with a capacity of over 500,000 bpd. This facility would help reduce Indonesia’s reliance on imports and improve energy security. The new plant, with a capacity of 531,500 bpd, would be one of the largest in the region.
Indonesia’s domestic crude oil production has fallen to around 600,000 bpd, a significant drop from the peak of 1.6 million bpd in the 1990s. Since 2000, the country’s output has decreased by nearly 60%. As domestic production has declined, Indonesia has had to rely more on imports to meet its growing fuel and crude oil demand.
The move to increase refinery capacity aligns with President Prabowo Subianto’s push for energy self-sufficiency. This goal is particularly important for a nation that exports crude oil but now finds itself importing more to fulfill its domestic needs.
In his inauguration speech in October 2024, President Subianto emphasized the importance of reducing regulatory hurdles to boost oil and gas exploration. The initiative is part of efforts to revive the country’s domestic oil and gas industry and strengthen its energy security.
“We must have energy self-sufficiency, and we are capable of being self-sufficient,” President Subianto declared.
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