Indonesia inaugurated on Monday the upgraded Balikpapan refinery, which cost $7.4 billion to redevelop and is another step toward self-sufficiency in fuel supply.
Indonesian President Prabowo Subianto and Energy Minister Bahlil Lahadalia attended the inauguration ceremony for Pertamina’s refinery, whose processing capacity has been raised to 360,000 barrels per day (bpd) from 260,000 bpd, making it the country’s largest refinery in terms of capacity.
“We must be capable of producing our own food and energy,” Subianto, the president of Southeast Asia’s biggest economy, said.
“With the energy sources we have, we can actually produce our own energy, without needing to import energy. This is our goal for the next five to seven years,” the president added.
Thanks to the biodiesel mandate and rising production from the upgraded refinery, Indonesia could be able to stop importing gasoil and jet fuel by 2027, Energy Minister Lahadalia said at the inauguration ceremony.
“In 2027, God willing we no longer import jet fuel, only importing crude oil,” the minister said.
Last year, Indonesia allowed private fuel retailers, including the units of BP and Shell, to import fuel via state-controlled energy firm Pertamina.
Indonesia removed Pertamina’s monopoly in the fuel retail market two decades ago. But the state oil and gas firm has continued to have a dominant position in supply, while private retailers have suffered from continued restrictions on the import of non-subsidized fuel.
Indonesia is also looking to reverse a decline in its crude oil production in a bid to reduce dependence on imports as its fuel demand continues to rise.
Last month, Indonesia put up for tender eight new blocks to be awarded to companies. The blocks are estimated to hold billions of barrels of crude oil and billions of cubic feet of gas as Indonesia looks to reduce its import dependence and reverse a years-long decline in its oil production.
Indonesia looks to unlock its upstream potential by offering more than 100 previously untapped oil and gas basins to global investors for exploration.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com
- Global Upstream Capex Set To Fall Again In 2026 Amid Low Oil Prices
- Egypt Announces Oil and Gas Discoveries in Western Desert
- China Welcomes EU Guidance on Minimum EV Prices After Tariff Dispute
