JAKARTA, RAKYAT NEWS – The Indonesian Ministry of Energy and Mineral Resources (ESDM) has unveiled plans to construct a new oil refinery with a capacity of 500,000 barrels per day. This ambitious project, estimated to cost $12.5 billion (approximately Rp 203.87 trillion), is part of the government’s broader strategy to strengthen national energy security. The refinery is designed to process both domestic and imported crude oil, aiming to reduce Indonesia’s reliance on imported fuel and ensure a more stable energy supply.

The project is expected to be funded by Danantara, Indonesia’s sovereign wealth fund, following a thorough due diligence process. ESDM Minister Bahlil Lahadalia emphasized that the refinery will be one of the largest in the country, with a production capacity of 531,500 barrels per day. This initiative is part of the first phase of 21 downstream projects approved by President Prabowo Subianto, with a total investment value of $40 billion.

The new refinery is projected to save Indonesia up to $16.7 billion annually by reducing oil imports. Additionally, it is expected to create significant employment opportunities, with estimates suggesting the absorption of 63,000 direct jobs and 315,000 indirect jobs. This aligns with the government’s goal of boosting economic growth and reducing unemployment through large-scale infrastructure projects.

President Prabowo has approved the first phase of downstream projects, which include not only the oil refinery but also other initiatives such as coal gasification and the construction of crude oil storage facilities on Nipah Island, Batam. These projects aim to enhance Indonesia’s energy resilience by ensuring a 30-day domestic crude oil supply and diversifying energy sources.