Jakarta, Indonesia Sentinel — President Joko Widodo (Jokowi) has issued a stern reminder to President-Elect Prabowo Subianto, emphasizing that Indonesia’s oil lifting rate must increase annually to prevent further economic strain.
“Do not let our oil lifting rates decline, not even by a liter. It must increase every year,” said Jokowi during the 79th anniversary celebration of the Ministry of Energy and Mineral Resources in Jakarta on Friday (October 11, 2024).
Jokowi underscored the need to optimize the productivity of Indonesia’s existing oil wells to prevent further decline in domestic oil production. If oil production decreases, Indonesia will be forced to rely more heavily on costly oil imports.
“The focus on oil lifting must be maintained, and the wells we have must be optimized. If production declines, it will cost the government a huge amount of money,” Jokowi remarked.
Jokowi revealed that the Minister of Finance, Sri Mulyani, had reported concerns over the decreasing oil lifting rates, which have significant financial implications if not addressed.
Although the drop in oil production may seem small, the resulting financial burden due to increased imports is substantial.
“Even a slight reduction in oil output—50 or 100 barrels—translates into billions in import costs, draining our national revenue,” he said.
Jokowi highlighted the need for a multi-faceted approach to address the issue, involving government initiatives, state-owned enterprises, and collaborations with both private and foreign entities.
“It doesn’t matter if we handle it ourselves, through state-owned Pertamina, partnerships with private companies, or collaborations with foreign enterprises. It all needs to be done,” he added.
During his speech at the Subroto Award event in Jakarta, Jokowi emphasized the strategic importance of the energy and mineral resources (ESDM) sector. He noted that during his two terms in office, state revenue from the sector had reached IDR 1,800 trillion (USD 117 billion).
In addition, Jokowi advocated for continued downstream processing (hilirisasi) in the energy and mining sectors, citing the benefits of value-added production.
Over the years, Indonesia has focused on refining minerals and reducing the export of raw materials, which had historically benefited foreign economies at the expense of domestic growth.
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Bahlil Lahadalia, Indonesia’s newly appointed Minister of Energy and Mineral Resources, echoed Jokowi’s call to action, emphasizing the urgency of improving oil production through technological innovations and streamlining bureaucratic processes in the oil and gas sector.
(Becky)
