Indonesia plans to build oil refineries with a total capacity of 1 million barrels per day at 18 locations across the country, along with oil storage facilities at the same locations. The refinery project is estimated to require an investment of 160 trillion IDR, and the storage facilities 72 trillion IDR. It is expected to provide 50,960 new jobs for the community, reduce fuel imports, save foreign exchange, and strengthen national energy security and economic resilience. Construction locations include 18 areas such as Lhokseumawe, Sibolga, Natuna, Cilegon, Sukabumi, Semarang, Surabaya. As the investment management agency, Danantara is seen as a new hope for the realization of this project, participating in various key stages. They are responsible for perfecting the project's pre-feasibility study; determining financing plans, project prioritization, business models, and implementing entities; selecting construction locations and preparing for groundbreaking; and accelerating the resolution of issues related to permits, land preparation, and social and environmental mitigation. The founder and advisor of ReforMiner Institute believes that Danantara's involvement brings new vitality to the project, helping to resolve funding and supply chain issues. He noted that Indonesia had experience building a 1 million barrel per day refinery before 1994, and that the current project is included in priority plans, making it more mature in terms of politics, funding, and investment priorities. He is optimistic about the project.
The Chairman of the Investment Committee of the Indonesian Oil and Gas Business Association supports the construction of the refinery, believing it can reduce fuel imports and benefit the people. He cautioned that the project's economics need to be precisely calculated to prevent cost overruns, and also questioned the refinery locations, noting that most are located outside Java Island, which could increase logistics costs. He also pointed out that small refineries may not be economical and economies of scale should be considered. The CEO of Danantara stated that they are willing to provide funding for the 18 priority downstream projects, with financing channels including Danantara itself, relevant state-owned enterprises, and public-private partnerships. He prefers to cooperate with domestic and foreign enterprises, especially requiring advanced foreign technology to ensure the implementation of investment projects. Historically, there have been cases of significant cost overruns in similar projects, such as the RDMP Balikpapan project, whose costs increased from approximately 4 billion USD to 7.4 billion USD. Such occurrences need to be guarded against. The distance of the locations from the main consumer market (Java Island) may lead to higher logistics costs. The project requires substantial funds and needs multi-party cooperation to share risks, avoiding the complication of the project's finances due to new loans.
Indonesia plans to build oil refineries with a total capacity of 1 million barrels per day at 18 locations across the country, along with oil storage facilities at the same locations. The refinery project is estimated to require an investment of 160 trillion IDR, and the storage facilities 72 trillion IDR. It is expected to provide 50,960 new jobs for the community, reduce fuel imports, save foreign exchange, and strengthen national energy security and economic resilience. Construction locations include 18 areas such as Lhokseumawe, Sibolga, Natuna, Cilegon, Sukabumi, Semarang, Surabaya. As the investment management agency, Danantara is seen as a new hope for the realization of this project, participating in various key stages. They are responsible for perfecting the project's pre-feasibility study; determining financing plans, project prioritization, business models, and implementing entities; selecting construction locations and preparing for groundbreaking; and accelerating the resolution of issues related to permits, land preparation, and social and environmental mitigation. The founder and advisor of ReforMiner Institute believes that Danantara's involvement brings new vitality to the project, helping to resolve funding and supply chain issues. He noted that Indonesia had experience building a 1 million barrel per day refinery before 1994, and that the current project is included in priority plans, making it more mature in terms of politics, funding, and investment priorities. He is optimistic about the project.
The Chairman of the Investment Committee of the Indonesian Oil and Gas Business Association supports the construction of the refinery, believing it can reduce fuel imports and benefit the people. He cautioned that the project's economics need to be precisely calculated to prevent cost overruns, and also questioned the refinery locations, noting that most are located outside Java Island, which could increase logistics costs. He also pointed out that small refineries may not be economical and economies of scale should be considered. The CEO of Danantara stated that they are willing to provide funding for the 18 priority downstream projects, with financing channels including Danantara itself, relevant state-owned enterprises, and public-private partnerships. He prefers to cooperate with domestic and foreign enterprises, especially requiring advanced foreign technology to ensure the implementation of investment projects. Historically, there have been cases of significant cost overruns in similar projects, such as the RDMP Balikpapan project, whose costs increased from approximately 4 billion USD to 7.4 billion USD. Such occurrences need to be guarded against. The distance of the locations from the main consumer market (Java Island) may lead to higher logistics costs. The project requires substantial funds and needs multi-party cooperation to share risks, avoiding the complication of the project's finances due to new loans.