Russia Interested in Investing in Oil Refinery and Storage, Ready to Strengthen Indonesia's Energy Resilience

The Indonesian government is accelerating energy supply diversification while promoting the development of strategic oil and gas infrastructure amid rising global energy supply disruption risks. In response to these needs, efforts to explore strategic partnerships have yielded results. Russia has expressed interest in building an oil refinery and storage facilities as part of efforts to strengthen national long-term energy resilience and reduce dependence on imported fuel oil (BBM). Energy and Mineral Resources Minister Bahlil Lahadalia stated that this commitment follows up on the meeting between President Prabowo Subianto and Russian President Vladimir Putin. “Yes, as I mentioned yesterday at the palace, following the President’s instructions, I was asked to follow up on the meeting between the two leaders, President Prabowo and President Putin, and in my meeting with the Russian Minister of Energy and Government, it was agreed that we will receive support from Russia,” Bahlil told reporters at the Ministry of Energy and Mineral Resources office on Friday (17/4). Currently, national BBM consumption reaches around 1.6 million barrels per day, equivalent to 39-40 million kilolitres (KL) per year. Meanwhile, domestic oil production is only about 600,000 barrels per day, so Indonesia still imports around 1 million barrels per day. To reduce imports, the government is relying on increasing refinery capacity through the Balikpapan Refinery Development Master Plan (RDMP) project and the implementation of mandatory 50 per cent biodiesel (B50) starting July 2026. “Now, for petrol, we import it; our total consumption is nearly 39-40 million KL. From that, our domestic production before the Balikpapan RDMP was 14.3 million KL. The addition from the Balikpapan RDMP is 5.6-5.7 million KL, so almost 20 million kilolitres, meaning our imports will be left at 50 per cent,” he explained. Regarding the Russian investment plan, the government is still refining the cooperation scheme to be carried out through government-to-government (G2G) or business-to-business (B2B) mechanisms. “That was one of the points we discussed yesterday; indeed, there are several of their investments that are ready to enter, but the finalisation awaits 1-2 more rounds with us, specifically regarding the refinery and storage. We will announce it later,” Bahlil said on Thursday (16/4) at the State Palace. He emphasised that this project plan is different from the Tuban Refinery development, which is a cooperation between PT Pertamina and the Russian company Rosneft Oil Company. The scale of the project currently being explored is said not to be as large as the Tuban Refinery. The construction of the refinery and storage facilities is considered crucial for increasing energy reserve capacity, strengthening supply flexibility, and mitigating the impact of global energy market volatility on domestic supply and prices.