If the discussions progress, the project could mark another important step in Indonesia’s push towards a more resilient and self-reliant energy sector
Indonesia has begun discussions with India’s Essar Group on plans to develop a new oil refinery, as the country looks to strengthen its energy security and reduce reliance on fuel imports, reported channelnewsasia.com quoting sources from Reuters news agency.
Indonesia’s Energy and Mineral Resources Minister, Bahlil Lahadalia, said he recently met representatives from Essar Group along with officials from state-owned energy company Pertamina to explore the proposal. The talks focused on expanding Indonesia’s domestic oil refining capacity and encouraging more value-added activities within the country’s energy sector.
In a statement shared on his verified Instagram account, Bahlil said the proposed investment is expected to align with government policies and support Indonesia’s long-term goal of national energy security. While no specific details about the size, location, or timeline of the refinery were disclosed, the discussions signal growing interest from international partners in Indonesia’s downstream energy sector.
Reducing fuel imports is a key priority for President Prabowo Subianto’s administration, which has set ambitious targets to achieve greater energy self-sufficiency
Despite being a major energy producer, Indonesia still imports a significant portion of its refined fuel due to limited domestic refining capacity.
Pertamina has been working for years to modernise and expand its refineries to address this gap. Most recently, the company completed a major upgrade of its Balikpapan refinery, a project valued at around $7.4 billion. This upgrade is expected to significantly increase fuel output and improve product quality.
In addition, Pertamina has merged its refinery and logistics units in a move aimed at improving efficiency and strengthening its downstream operations. The potential collaboration with Essar Group could further support these efforts by bringing in foreign investment, technical expertise, and global experience in refinery development.
