2024-12-10
Indonesia is taking a bold step towards achieving energy self-sufficiency with its plans to build a large-scale oil storage facility near Singapore. This initiative aligns with President Prabowo Subianto’s commitment to enhancing energy resilience amidst geopolitical uncertainty and volatile global oil markets.
The proposed facility, capable of storing oil for up to 30-40 days, will empower state-owned energy giant Pertamina to purchase oil in bulk at global market prices. This move aims to reduce Indonesia’s reliance on third-party storage and intermediaries, significantly cutting costs and enhancing energy security. Currently, Indonesia imports approximately 60% of its oil from Singapore despite being a major oil importer. The new facility seeks to address this dependency while creating a strategic buffer against supply chain disruptions caused by global conflicts.
The facility’s importance is underscored by Indonesia’s limited oil reserves, which currently last only 21 days. Minister of Energy and Mineral Resources Bahlil Lahadalia emphasized the urgency of increasing storage capacity to safeguard the nation’s energy resilience. Furthermore, the government is working to revive dormant oil fields and streamline regulations to reverse a decade-long decline in production. With 16,600 idle fields, of which 5,000 have significant production potential, revitalization efforts could boost output and reduce crude oil imports, which currently cost the country US$31.4 billion annually.
This initiative complements President Prabowo’s broader energy agenda, including commitments made at the recent G20 and APEC summits to phase out fossil fuels and significantly increase Indonesia’s renewable energy capacity over the next 15 years.
As Indonesia progresses towards energy self-sufficiency, this ambitious oil storage plan represents a critical step in reducing reliance on volatile global markets and strengthening the nation’s energy sovereignty.
