By: Nurul Janida )*
The government of the President of the Republic of Indonesia, Prabowo Subianto, has set a strategic step to increase national energy security through the construction of an oil refinery with a capacity of 1 million barrels per day (bpd). This project will not only strengthen the energy sector, but is also expected to be able to create new jobs and support the downstreaming program of related sectors such as fisheries, forestry, and plantations.
The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, said that the government’s decision to build an oil refinery with a capacity of 1 million barrels per day is an important step taken after significant changes in the initial planning.
Initially, the planned refinery capacity was 500 thousand barrels per day, but after further evaluation and analysis, the capacity was increased to 1 million barrels per day. The construction of this refinery will be carried out in several strategic locations in Indonesia, including Java, Sulawesi, Maluku, and Papua, to ensure even distribution of energy throughout the region.
Bahlil also emphasized that this oil refinery is not only to meet domestic needs, but also as an effort to mitigate the impact of increasing energy imports from imports of around 1 million barrels per day. With this refinery, Indonesia can reduce dependence on imports and increase energy security. This project is also equipped with the construction of an oil storage facility that can accommodate 1 million barrels per day, thereby increasing the capacity for energy distribution more efficiently.
The plan is different from the initial concept which wanted to establish an oil processing refinery with a capacity of 500 thousand bpd in one particular location. Bahlil said that there are two companies from the United States (US) and China that will be candidates for technology providers for the oil refinery.
The Minister of Energy and Mineral Resources (ESDM) continued, he had asked the US and Chinese companies to present the technology that will be used in this project on Monday next week. Bahlil also said that he had not been able to calculate the investment value for the construction of the oil refinery.
The government has decided to build an oil storage tank with a capacity of 1 million bpd on Nipah Island, Batam. This project aims to thicken the domestic supply of raw oil for 30 days.
Dewi Yustisiana, a member of Commission XII of the Indonesian House of Representatives, expressed her support for the government’s plan and assessed that the construction of this oil refinery is the right step to reduce Indonesia’s dependence on fuel and LPG imports. With a larger refinery capacity, Indonesia can save significant foreign exchange. The construction of this refinery is expected to significantly reduce fuel imports.
Dewi said that the construction of this oil refinery has the potential to save around USD 16.7 billion with a refinery capacity of 500 thousand barrels per day, so that figure is estimated to be even greater if the refinery built has a capacity of 1 million barrels per day.
According to Dewi, the success of this oil refinery construction project is very important to ensure Indonesia’s long-term energy security. The success of this project, along with coal gasification, will be the key to reducing dependence on energy imports. With this step, Indonesia can be more independent in terms of energy and no longer affected by fluctuations in international energy prices that often harm the economy.
Energy security is not just about the availability of energy, but also involves wise management of natural resources, efficiency in distribution, and the development of new and renewable energy technologies. The Indonesian government has demonstrated its commitment to achieving this through the development of more modern and environmentally friendly energy infrastructure. In addition, the construction of this oil refinery is also expected to create significant jobs, support the local economy, and improve community welfare.
In addition, the construction of this oil refinery will also have a positive impact on the downstream industrial sector, especially the fisheries, plantations, and forestry sectors. This project opens up great opportunities for the community and industry players to develop their businesses better. In addition, increasing domestic energy production capacity will reduce transportation and energy distribution costs which have been challenges in many regions in Indonesia.
The construction of an oil refinery with a capacity of 1 million barrels per day is also in line with Indonesia’s goal of achieving renewable energy targets. Reducing dependence on fossil fuels such as oil and gas is one of the strategic steps towards sustainability. However, in the short term, increasing the capacity of this oil refinery is still needed to uk guarantees a stable energy supply for Indonesia.
With this oil refinery, Indonesia is expected to strengthen its strategic position as one of the energy producing countries in the Southeast Asia region. In addition, this project will provide great economic benefits, both in terms of foreign exchange savings and the creation of new jobs. This oil refinery project will also be one of the sectors that makes a significant contribution to Indonesia’s economic growth in the coming decades.
The strategic steps taken by the government are expected to achieve better and more independent energy security in the future. The oil refinery construction project with a capacity of 1 million barrels per day is not only a big investment, but also a commitment to safeguarding Indonesia’s energy future.
)* The author is a Malang student living in Jakarta
