Indonesia Launches Major Refinery Upgrade to Boost Fuel Production

Background and Significance

Indonesia has inaugurated the Refinery Development Master Plan (RDMP) Balikpapan, a significant upgrade to its oil refinery capacity. This project marks the first major refinery development in 32 years, highlighting Indonesia's commitment to modernizing its energy infrastructure ⁴

Key Features and Benefits

The RDMP Balikpapan upgrade will increase the refinery's capacity to 360,000 barrels per day, thanks to the addition of new facilities such as the Crude Distillation Unit (CDU) and Residual Fluid Catalytic Cracking (RFCC) ³

Economic Impact

The project is expected to have a substantial economic impact by saving Rp 60 trillion in foreign exchange annually. The increased domestic production will help meet the country's fuel needs, with the potential to produce 5.8 million kiloliters of gasoline per year ³

Reduction in Imports

The successful implementation of the RDMP Balikpapan is part of Indonesia's broader strategy to reduce its dependence on imported fuels. Minister of Energy and Mineral Resources, Bahlil Lahadalia, has announced plans to halt diesel imports by the end of 2026, leveraging the B50 program that is currently in testing ³

Implementation and Oversight

The project was undertaken by PT Pertamina (Persero) through its subsidiary PT Kilang Pertamina Internasional (KPI). The Indonesian government has been actively involved in overseeing the project's progress, with Minister Bahlil reporting directly to President Prabowo Subianto on the project's developments ²

Challenges and Controversies

Despite its successes, the project faced challenges, including reports of sabotage during its implementation. Minister Bahlil revealed that parts of the refinery facilities were deliberately burned, causing delays in the project's completion ¹

Conclusion

The RDMP Balikpapan represents a significant step forward in Indonesia's energy sector, enhancing the country's refining capacity and reducing its reliance on imported fuels. As the project continues to ramp up, it is expected to contribute positively to Indonesia's energy security and economy.