JAKARTA: Indonesia plans to build an oil backup service on an area near Singapore- connecting with President Prabowo’s goals for energy self-sufficiency- amid political uncertainty, according to a government minister.  ,
The new storage facility will be designed to house various types of oil, according to Energy and Mineral Resources Minister Bahlil Lahadalia on Wednesday ( Dec. 11 ), but he did not specify the location and details of its construction.  ,
At a Golkar party event in Jakarta, he was quoted as saying,” The storage facility will be able to store oil for up to 30 to 40 days, and Pertamina will purchase oil ( from the facility ) at global economic prices so that we can achieve energy sovereignty.”  ,
In light of the ongoing conflicts in Gaza and Ukraine, which have hampered global oil and gas supply chains, the new facility will allow the state-owned energy company Pertamina to buy oil in bulk, reducing its dependence on the dangerous world market.  ,
Putra Adhiguna, managing director of the think tank Energy Shift Institute, applauded this action, stating that the new facility might have” strategic buffer ( oil ) reserves” and adding that the reserves Indonesia currently have are for operational use.
” This is an important move, considering Indonesia is a major oil supplier so having proper cushion reserves is essential for security, especially with the government’s plan on power security”, Putra told CNA.  ,
According to an Antara record in April, Pertamina’s primary energy trade sources are Singapore, comprising 56.58 per cent of overall energy imports, followed by Malaysia at 26.75 per cent and India at 6.28 per cent.  ,
However, the United States, the United Arab Emirates and Qatar are the primary solutions of Pertamina’s imported liquefied gas fuel.  ,
The new center therefore also seeks to reduce Indonesia’s heavy emphasis on Singapore, as reported by The Jakarta Globe.  ,
Indonesia imports 60 % of its fuel from Singapore, despite the fact that it does not have any fuel. This is extremely mind-blowing to me”, Bahlil, who is the Golkar party president, said on Oct 11, while quoted by Antara.  ,
The program is also expected to reduce expenses related to third-party store, transport and entity taxes, thus facilitating more cost-efficient fuel purchases.  ,
Despite having none of its own oil and gas resources, Singapore is one of the world’s top three export refining centres, according to the country’s Economic Development Board.  ,
The city-state imports crude oil from countries such as the United Arab Emirates, Qatar, Saudi Arabia and Kuwait.
In addition, Bahlil also highlighted Indonesia’s low oil supplies which he considered a concern, emphasising the importance of increasing storage capacity to enhance energy resilience.  ,
” This is a geopolitical issue. His statement was quoted by the Jakarta Globe as saying,” Our oil reserves and storage can only last for 21 days if our country goes to war.”  ,
With plans to reduce regulations, reactivate idle wells, and increase output, the new Prabowo administration reportedly intends to revive oil and gas production in an effort to reverse a ten-year decline in output.  ,
” We must have energy self-sufficiency and we are capable ( of being ) self-sufficient”, Prabowo said in his inauguration speech on Oct 20, citing geopolitical tension.  ,
He also intended to leverage efforts made by the previous administration, led by former president Joko” Jokowi” Widodo, to boost massive gas discoveries in South Andaman and reduce biofuel use.  ,
In October, Bahlil said that the Indonesian government planned to maximise the use of existing oil fields to reduce crude oil imports, which have reached a value of approximately 500 trillion rupiah ( US$ 31.4 billion ) annually.  ,
The government intends to revive oil fields that have been idle by roking licenses in order to accomplish this goal, he added.
According to him,” I asked why these wells are not being operated, and the answers were unclear. It seems that I will start revocation of business licenses as we are looking at the potential to reorganize wells that are not being worked on by contractors, including state-owned enterprises,” he said on October 9 as quoted by the Jakarta Globe.  ,
Based on data from Bahlil’s Ministry of Energy and Mineral Resources, Indonesia has nearly 45, 000 oil fields, with 16, 600 considered inactive.  ,
Among these idle fields, around 5, 000 are seen to have the potential to be revitalised to boost national oil production.  ,
” For wells that are not being optimised, we will revoke their license and offer them to those capable of increasing our national production, we should not hold on to them, our country needs this”, Bahlil added.  ,
Indonesia’s oil production, which was formerly an Organization of Petroleum Exporting Countries ( OPEC ), decreased to less than 600,000 barrels per day in 2024 from a peak of roughly 1.6 million barrels per day in the 1990s, which is attributed to declining investment and aging blocks.  ,
In addition, the country’s oil consumption has more than doubled to 1.5 million barrels per day, leading to imports of fuel and oil, which have cost the US$ 28 billion annually over the past ten years.  ,
According to the Jakarta Globe, this oil issue has contributed to the rupiah’s fluctuating value.