Indonesian government targeting to be free from oil import starting 2026, said the state-owned energy producer' director last week - Photo by InsiderStories.

JAKARTA (TheInsiderStories) – Indonesian government targeting to be free from oil import starting 2026, said the official last week. To support the government plans, state-owned energy producer,PT Pertamina aimed to build two Grass Root Refinery (GRR) in Bontang in East Kalimantan and Tuban in East Java, as well as developing refinery capacity (RDMP) it existing block in Dumai, Balikpapan, Balongan and Cilacap.

According to the director at energy and mineral resources ministry, Mohammad Hidayat, based on the fuel supply and demand prognosis for 2020 – 2026, the production was estimated at 87.4 million kiloliters (KL), while the demand or demand reached 85.1 million KL. The government compiled a prognosis for this fuel requirement assuming an increase in demand of 3.16 percent per year, he adds.

“This prognosis is based on the availability of existing data and the refinery projects that are being built and will be completed in what year, and how much production can meet domestic fuel needs,” he said in his official statement on Friday (05/29).

Hidayat revealed, in 2020 – 2021, fuel production from domestic refineries is still stagnant while demand continues to grow and refers to economic growth, demand is growing 3.16 percent per year. Then, in 2022 it is estimated that there will be additional fuel production from Balongan and the fuel imports were estimated at 25.9 million KL, domestic fuel production at 47.8 million KL, and fuel demand is estimated at 74.7 million KL.

Then, the completion of the Balikpapan its expecting in 2023 and will contribute to additional fuel production at 57.5 million KL and imports fall slightly to 25 million KL. Fuel demand is projected at 77.3 million. For 2024, fuel demand is estimated at 80 million KL, fuel production remains at 57.5 million KL and imports at 25.9 million KL.

Fuel imports are projected to decline drastic in 2025 where the demand is estimated at 82.5 million KL, while fuel production reaches 68.1 million KL and imports 13.4 million KL. The decline in imports is due to an additional production of fuel from Bontang refinery.

“In 2026, its expected that there will be additional production from Cilacap and Tuban. With the completion of the RDMP and GRR construction, we don’t need to import fuel again,” said by Hidayat.

While, spokeswoman from Pertamina asserted, the company to maintain production levels to meet national oil and gas production targets and the continued supply of energy. In the first quarter (1Q) of 2020, the largest oil producer recorded 918.8 million barrels of oil equivalent per day (MBOEPD).

In details, said Fajriyah Usman, oil production averaged 420.4 MBOPD and natural gas production reached an average of 2887.9 million standard cubic feet per day (MMSCFD). She continued, that a number of Pertamina’ upstream subsidiaries that contributed to the production, including PT Pertamina EP (PEP), PT Pertamina Hulu Indonesia (PHI), and PT Pertamina International EP (PIEP), especially in the Algerian field.

The unit of PHI, PT Pertamina Hulu Mahakam, which managed the Mahakam Block, posted an average gas production of 659 MMSCFD and PHM’ oil and condensate production reached 30.34 MBOPD. Its other subsidiary, PT Pertamina Hulu Sanga Sanga was produced 11.95 MBOPD or jumped 138.5 percent compared to the target in 1Q 0f 2020.

Then, Pertamina Upstream East Kalimantan oil production, which is also a subsidiary of PHI, reached 11.26 MBOPD or 109.6 percent above the targeted of 10.27 MBOPD. And, overseas production recorded by PIEP has also succeeded in contributing to oil and gas production of 156 MBOEPD or rose 103 percent at the 1Q of 2020′ targets.

Usman continued, In 2019, Pertamina prepared an investment value for the upstream sector worth of US$2.45 billion, or around 60 percent of its’ total investment $4.1 billion. For 2020, the largest producer in the country will remain committed to maintaining upstream investment levels in the same range as 2019, she added.

Separately, Pertamina EP and PT Pertamina Hulu Energi (PHE) agreed on the sale of natural gas amounting to 318.65 Billion British Thermal Units per Day (BBTUD) for the needs of the domestic industry. According to the EMR ministerial decree, this agreement is valid until 2024 and can be extended again.

She detailed, for the fertilizer sector, the volume reached 183.2 BBTUD, the 10 BBTUD steel sector and the industrial sector at 125.45 BBTUD. Of this amount, 277,555 BBTUD will be supplied by Pertamina EP and 41.1 BBTUD from PHE ONWJ.

A natural gas sales agreement for the fertilizer sector was signed between Pertamina EP with state-owned fertilizer producer, PT Pupuk Sriwidjaya for the South Sumatra region and PHE ONWJ with PT Pupuk Kujang Cikampek for the fertilizer industry in the West Java region. As for the steel sector, Pertamina EP has signed an agreement on the sale of natural gas with steel-maker, PT Krakatau Steel Tbk (IDX: KRAS), which operates in West Java, Jakarta and Banten.

For the industrial sector, Pertamina EP and PHE ONWJ have agreed on the signing of natural gas sales including gas producer PT Perusahaan Gas Negara Tbk (IDX: PGAS) and PT Pertagas Niaga for the North Sumatra, South Sumatra and West Java regions.

In addition, natural gas sales have also been signed with private sector such as PT Banten Inti Gasindo, PT Energasindo Heksa Karya, PT Bayu Buana Gemilang, PT Pelangi Cakrawala Losarang and PT Sadikun Niagamas Raya and on average operate in the West Java region.

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