Jonan: Petrochemical is the Future of Oil and Gas Industry

MINISTRY OF ENERGY AND MINERAL RESOURCES

PRESS RELEASE

NUMBER: 626.Pers/04/SJI/2019

Dated: 19th October 2019

Jonan: Petrochemical is the Future of Oil and Gas Industry

The ever increasing competition between industries, including that of the oil and gas industry, has demanded the energy sector make adjustments and innovation. To keep up with the trend, Minister of Energy and Mineral Resources Ignasius Jonan encourages an increased petrochemical business as a downstream branch of the oil and gas industry.

"Oil and gas is still important, the future is petrochemical. The oil is used for petrochemical, a number of derivatives can be made from the (natural) oil," explained Jonan early last week (14/10) at Hotel Luwansa Jakarta.

This change in the point of view of the oil and gas management and usage, according to Jonan, is in order to increase the impacts of multiplier output of the national economy. Moreover, oil and gas have long been directed as fuels, not as the raw material of petrochemical. "This culture of the oil and gas activity must be adjusted," Jonan asserted.

The dependency of many businesses on oil and gas products, according to Jonan, provides the petrochemical industry with a bright future. In addition, the government has assigned Pertamina to build a refinery or a plant to process oil into petrochemical. "Like it or not, the future market of midstream lies with petrochemical," he said.

Currently, Pertamina's capacity to process petrochemical is only 700 kilotons per annum (ktpa). However, this capacity will gradually increase in line with the addition of two new refineries, namely Tuban and Bontang, as well as four existing, revitalized refineries (Balikpapan, Cilacap, Balongan, and Dumai). When all is complete, Pertamina's petrochemical production by 2026 is targeted at around 6,600 ktpa.

As the regulator, Jonan said that the government is open to any constructive suggestions for the development of the oil and gas industry.

"The government accepts any suggestions about what efforts must be made to make this industry develop well. More importantly, to create fairness," Jonan concluded. (IY)

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

Agung Pribadi (081122135)

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