Indonesia reshuffles cabinet, names new energy minister

Outgoing Indonesian president Joko Widodo has reshuffled the cabinet and replaced the country's energy minister today, just weeks before he is due to leave office.

Bahlil Lahadalia will replace Arifin Tasrif as the minister of energy and mineral resources. Bahlil was previously Indonesia's minister of investment.
Joko will remain in office until October, after which current defence minister Prabowo Subianto will take over. Prabowo claimed victory in the country's presidential elections in February. His running mate was Gibran Rakabuming Raka, Joko's son.

It remains to be seen whether the change will affect the country's energy policy, but Bahlil said he would continue with the steps that Arifin has taken to increase oil lifting.

Indonesia has so far remained firmly focused on fossil fuels, despite its net zero by 2060 target. The country is targeting oil production of 1mn b/d and gas production of 12bn ft³/d (123.6bn m³/yr) by 2030, and the energy and mineral resources ministry ESDM has in recent weeks announced strategies to achieve these ambitious targets. Some of these strategies involve increasing production from existing fields by reactivating 1,000-1,500 idle wells, increasing the recovery rate from existing wells, and accelerating new projects.

But Prabowo in the run-up to the elections stated that he aims to reduce Indonesia's fossil fuel dependency, and for Indonesian state-owned utility PLN to increase the proportion of renewable energy in its power supply.

Indonesia banned nickel exports from 1 January 2020 and bauxite exports from 2023, leading to a boom in its downstream processing industry. The country has since emerged as the world's top processed nickel supplier, adding an estimated 1.17mn t of production during 2021-23, according to Australian bank Macquarie's research arm.

The export ban has also led to an increase in Chinese investment in Indonesia's nickel sector, with the increasing concentration of Chinese-backed Indonesian supply emerging as a key challenge as the US and EU look to reduce their dependence on other countries for critical raw materials.

But the increase in supply has pressured prices. French mining group Eramet and Germany-based global chemicals producer BASF announced in June that they are no longer pursuing investment in a nickel-cobalt refining complex in Weda Bay, Indonesia because of the downturn in prices.

By Prethika Nair