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Indonesia plans to start building strategic oil reserves this year

[JAKARTA] Indonesia plans to start installing tanks for its strategic petroleum reserves (SPR) and filling them this year with the goal of covering 30 days worth of emergency stocks eventually, the energy minister said on Thursday.

"This year we already got an allocation of 800 billion rupiah (S$82.81 million) from the state budget for the SPR, so we can start to have it this year," Energy Minister Sudirman Said told reporters.

He said the ministry has the necessary funding to purchase and store around 1.6 million barrels of crude at current prices. That represents 1-1.5 days worth of emergency reserves, according to the ministry.

The government is working on identifying the location for the storage, and whether state-owned Pertamina or another company will operate it.

Over the next five years, Indonesia wants to build up its SPR to cover 30 days worth of crude, estimated at around 45 million barrels.

"The SPR is in case of an energy crisis and emergency situations, such as when crude prices increase significantly, a tsunami, or refinery troubles," said Wirtmaja Puja, director general of oil and gas.