ESDM Deputy Minister: Indonesia Has 3.6 Million Barrels of Crude Oil Deadstock


GRESIK, – Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar said Indonesia has around 3.6 million barrels of crude oil deadstock which until now cannot be utilized.

The crude oil deadstock is in the tanks kept in the production facilities owned by the Contractors of Contract-based Cooperation (KKKS) spreading throughout Indonesia.

Arcandra revealed that when reviewing the Onshore Processing Facility (OPF) of PT Saka Energi Indonesia in Gresik on Saturday (9/8). He was accompanied by Director General of Oil and Gas Djoko Siswanto and Deputy Head of Upstream Oil and Gas Regulatory Task Force (SKK Migas) Sukandar. “Our main purpose to come here is to see the deadstock,” he said.

The deadstock is actually sediment of crude oil on the base of the tanks that due to its high viscosity it cannot be pumped out. As the amount is quite significant, Arcandra said he urged every parties involved to find a way to make use the crude oil.

“The government wants to utilize the deadstock. The sediment of crude oil can be diluted and cleaned so that we can pump it out and sell it,” he added.

“Our deadstock is now reaching 3.6 million barrels spreading all over Indonesia. Well, we will try to reduce it at a reasonable level,” said Arcandra.

During this time, for the oil and gas working areas with production sharing contracts and cost recovery schemes, the deadstock has been included as a cost must be paid by the state. This is certainly not efficient and has the potential to reduce the revenue due to the excess of cost recovery.

Arcandra further said that he is optimistic in terms of technology, the KKKS contractors in Indonesia are able to convert the deadstock into useful products that can be sold.

“The issue is not a technology or technical engineering problem. The deadstock can be collected and transported to available refineries in the country to be reprocessed into saleable products,” he said.

“The technology is there. There are some options and we will evaluate which technology is feasible and economically fit,” Arcandra concluded. (SETKAB/TPP)