Target Lifting 1 Million Barrels Resigns, What Is The Fate Of New Refineries In Indonesia?

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) revealed that the oil production target of 1 million barrels per day (bph), which was originally expected to be achieved by 2030, will be postponed to 2032.

Secretary General of the National Energy Council (DEN), Djoko Siswanto, said that if domestic oil production continues to decline, it will certainly have an impact on investment at several refineries that will only be built, one of which is the Tuban Refinery.

The Tuban Refinery project is a project owned by PT Pertamina (Persero) which holds 55 percent of shares and a Russian company, Rosneft holds 45 percent of shares.

"In fact, if domestic production continues to decline, the Tuban Refinery investment could be delayed because we don't have the raw materials, right. Meanwhile, cooperation with Russia and Rosneft," Djoko said at the Energy Corner quoted Tuesday, July 18.

Meanwhile, another obstacle faced by Indonesia is that currently, Indonesia cannot import crude oil from Russia, considering that Indonesia must maintain good relations with other countries when Russia and Ukraine still have a geopolitical conflict.

According to him, by continuing to decline in the number of liftings, it could hinder the construction and production of refineries in the future.

Not only on the upstream side, from the downstream side it will also be affected by the lack of oil supply from refineries that run out of fuel.

"If production does not exist or is temporarily postponed, 70 percent want EBT, then people will want to invest in EBT. It's too late. Even though we need it now until Indonesia Gold in 2035. The peak of emissions is 2035," continued Djoko.

For this reason, he emphasized that currently Indonesia needs crude or crude supply as raw material for the refinery to produce. So that when the time comes for Indonesia to head for an energy transition, Indonesia can slowly reduce the use of fossil energy such as coal, oil and gas.

Djoko also said that the decline in the 1 million barrel lifting target would also have an impact on the postponement of Net Zero Emission achievements by 2060. Moreover, he said, President Joko Widodo also directed to increase the use of fuel from new renewable energy such as bioethenol to NZE.

Djoko added that Indonesia should continue to carry out oil lifting in order to reduce dependence on fossil fuels which are recently imported from abroad.

Djoko also highlighted the use of crude oil as raw material for refinery production. If fulfilled, Djoko is worried that the amount of oil imported will increase.

For this reason, he encouraged the lifting target to continue to be increased with a long term plan (LTP) of 1 million barrels by 2030. Djoko also emphasized that this lifting target should be accelerated and not even pushed back.

Unlike gasoline fuel that can be replaced with bioethenol, electric vehicles and gas fuel, then LPG which is replaced with electric, DME or gas stoves to households, crude oil for refineries has no other alternative than to boost its lifting continuously

"Imports can only reduce by increasing domestic production. There is no other way. If solar imports, Alhamdulillah, they have succeeded in overcoming them by B30 and B35," concluded Djoko.