Minister Arifin: RDMP Runs for Sure, NGRR, Must Run

MINISTRY OF ENERGY AND MINERAL RESOURCES

PRESS RELEASE

NUMBER: 637.Pers/04/SJI/2019

Dated: 1st November 2019

Minister Arifin: RDMP Runs for Sure, NGRR, Must Run

Construction of new refineries (New Grass Root Refinery/NGRR) and development of refinery capacity (Refinery Development Master Plan/RDMP) have a strategic value for Indonesia. The refinery construction and development will create better energy security.

"If we don't have refineries to process our oil, a number of events can affect us, for example, if there is a sudden shortage of supply, we have to source from the spot market, sometimes at a premium. But if we have refineries here (in the country) prices will be stable," said Minister of Energy and Mineral Resources (EMR), Arifin Tasrif after the Friday prayers today, Friday (1/11).

Currently, there are 6 RDMP and NGRR projects to boost production capacity of oil fuels (BBM). Those 6 projects are RDMP Cilacap, RDMP Balikpapan, RDMP Balongan, RDMP Dumai, NGRR Tuban, and NGRR Bontang. The national refinery production is currently about 1 million barrels per day which is expected to grow to about 2 million barrels per day with the operation of the 6 refineries.

The Government is committed to completing the refinery construction and development fast, specially the RDMP. "We have sufficient natural resources, specially oil and gas, we should process it in the country. If we buy oil overseas, the profits and added value will be enjoyed by foreign nationals," Arifin added.

Arifin states that fuel needs will always develop in line with increased demands; even so, refinery construction and development are done in stages that it will take some time.

"For RDMP, as soon as the gong bangs, it runs; but for NGRR there are steps, from feasibility study, land clearing, financial support, and then Engineering Procurement and Construction (EPC). Usually after the financial stage, EPC runs. So for the RDMP, it runs for sure and the NGRR, must run," Arifin asserts.

The policy to construct new refineries and develop existing refineries is intended to boost fuel supply in order to meet the domestic demands and to create added value to the national development. The Government has prioritized 4 RDMP projects for quick completion, namely RDMP Cilacap in Central Java, RDMP Balikpapan in East Kalimantan, RDMP Balongan in West Java, and RDMP Dumai in Riau.

To speed up the policy, the Government has set a legal support of the refinery construction through Presidential Regulation No. 146 of 2015 on Development and Construction of Domestic Refineries that sets out funding scheme, land procurement, offtake product, and tax holiday. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

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