Can Indonesia Achieve Energy Resilience?
Energy resilience has become a top priority for the Indonesian government in addressing various interconnected strategic challenges that impact the country’s stability and progress. President Prabowo has emphasized the importance of reducing reliance on energy imports by increasing domestic production. However, with the rapid energy transition underway, crucial steps must be taken for Indonesia to achieve energy self-sufficiency.
Strategic Issues in Reducing Imports
Indonesia still depends on crude oil and natural gas imports to meet domestic energy needs. Some of the main challenges include:
- Declining Oil and Gas Production
Approximately 70% of Indonesia's oil wells have entered a mature phase, leading to a continuous decline in production. Meanwhile, exploration of new wells has not yet been sufficient to meet national demand. - High Dependence on Imported LPG
According to data from the Ministry of Energy and Mineral Resources (ESDM), around 6.9 million tons of LPG consumption out of a total national demand of 8.7 million tons per year still come from imports. This creates pressure on Indonesia's energy trade balance. - Limited Energy Infrastructure
The lack of downstream infrastructure, such as oil refineries and gas storage facilities, hampers efforts to increase production and optimize energy distribution.
Strategies to Reduce Dependence on Imports
To address these challenges, the government has developed various strategies to reduce reliance on imports:
- Increasing Domestic LPG Production
The government targets an increase in domestic LPG production by 1.5 million tons per year, reaching 3.5 million tons per year over the next 3–4 years. To achieve this target, 15 potential gas fields are being developed. - Oil Refinery Infrastructure Development
The construction and modernization of oil refineries in various regions, including the Refinery Development Master Plan (RDMP) and Grass Root Refinery (GRR) projects, aim to enhance domestic crude oil processing capacity. - Exploration and Reactivation of Oil and Gas Wells
The government targets the reactivation of around 5,000 inactive oil and gas wells and the intensification of exploration in high-potential areas. - Regulatory Reform and Investment Appeal
The government aims to simplify licensing processes and provide greater flexibility in production-sharing contracts, such as the New PSC Gross Split, to attract more investors to the national oil and gas sector and boost overall industry growth. - Diversification of Alternative Energy Sources
The development of biofuels, such as palm oil-based biodiesel with a blending target of up to 50%, is expected to reduce dependence on imported fossil fuels.
Building Sustainable Energy Resilience
Collaboration between the government and the private sector is essential to accelerate the development of energy infrastructure. The government can provide investment incentives and supportive regulations, while the private sector plays a role in implementing technology and building new energy facilities. With close cooperation, the energy transition can be carried out more effectively and efficiently.
Indonesia has a great opportunity to achieve energy independence if all parties work together to implement the right policies, build infrastructure, and continue innovating. With a comprehensive approach, the goal of energy self-sufficiency can be realized, bringing long-term benefits for economic stability and public welfare.
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