The Ministry of Energy and Mineral Resources (ESDM) has announced plans to build a new oil refinery as part of the national energy downstreaming strategy, with potential funding from the Daya Anagata Nusantara Investment Management Agency (Danantara) worth US$12.5 billion (Rp203.87 trillion).

ESDM Minister, Bahlil Lahadalia, stressed that the project aims to ensure a more stable and sustainable energy supply.

"We will build a refinery that In shaa Allah (God willing) will have a capacity of approximately 500 thousand barrels. This will be one of the largest in the future," Bahlil said on Wednesday, March 5, 2025.

This refinery will be designed to process crude oil from within the country and imported, with a production capacity of 531,500 barrels per day.

This refinery is expected to strengthen the national energy supply and reduce dependence on imported fuel oil.

The project also has the potential to save up to 182.5 million barrels of oil per year, equivalent to savings of US$16.7 billion.

Meanwhile, in terms of labor, the construction of this refinery is estimated to absorb around 63,000 direct workers and 315,000 indirect workers.

President Prabowo Subianto had earlier approved the proposal for the list of first-stage downstream projects in 2025 submitted by the National Downstream and Energy Resilience Task Force, which includes 21 priority projects in 26 mining commodity sectors worth US$40 billion.

"The overall target for downstream projects this year is US$618 billion," Bahlil said.

A number of other priority projects agreed upon include the construction of an oil refinery with a capacity of 500 thousand barrels and the construction of a crude oil storage facility in Batam, Riau Islands province, which aims to increase domestic supply of raw oil for 30 days.

Also included are the coal gasification project into dimethyl ether (DME) in three locations in Sumatra and Kalimantan as well as downstream projects in the agriculture, fisheries and forestry sectors.