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Indonesia to build strategic oil reserves

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According to Reuters, Indonesia has announced plans to commence installing tanks for its strategic petroleum reserves (SPR) and filling them this year with the aim of covering 30 days worth of emergency supplies eventually, the energy minister said on Thursday.

"This year we already got an allocation of 800 billion rupiah (US$61.07 million) from the state budget for the SPR, so we can start to have it this year," said Energy Minister Sudirman Said.

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

Identifying the location for the storage is a work in progress, and the government have yet to decide whether state-owned Pertamina or another company will operate it.

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

"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. (US$1 = 13 099.0000 rupiah).

Adapted from a press release by Louise Mulhall

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