Govt prepares BLU scheme for planned Russian oil imports
Thursday, May 21 2026 - 04:55 PM WIB
The Ministry of Energy and Mineral Resources (ESDM) is preparing a public service agency (BLU) scheme to facilitate planned crude oil imports from Russia, as the government seeks to secure up to 150 million barrels of supply by the end of 2026.
Hendra Gunawan, Director of Oil and Gas Program Development at the ministry’s Directorate General of Oil and Gas, said the government is preparing a presidential regulation to establish or appoint a BLU entity to handle the purchases.
“We have prepared a Presidential Regulation regarding the appointment of the BLU, and the follow-up mechanism will continue to be formulated through a Ministerial Regulation or Ministerial Decree,” Hendra told a hearing with House of Representatives Commission XII on Thursday.
He said discussions on the BLU structure are still ongoing, although the government has already drafted implementing regulations.
“We already have a draft ministerial regulation as a follow-up to the presidential regulation,” he said.
The planned import scheme marks a major step in Indonesia’s energy supply strategy as the government explores direct crude purchases from Russia under a government-to-government framework.
Director General of Oil and Gas Laode Sulaeman previously indicated that state-owned energy company PT Pertamina (Persero) would not directly import Russian crude oil.
According to Laode, Pertamina’s status as a global bond issuer is one of the main considerations behind the proposed structure. He said companies issuing global bonds must avoid activities that could potentially violate bond covenants, including transactions involving Russia, which remains subject to Western sanctions.
“We know that Pertamina conducts business using global bonds. Global bond issuers must avoid matters that could violate the terms of those bonds. That is why the scheme is currently being processed,” Laode said on the sidelines of the IPA Convention and Exhibition (IPA Convex) 2026 on Wednesday.
Read also: Indonesia weighs import schemes for Russian crude supply
Deputy Energy and Mineral Resources Minister Yuliot Tanjung previously said the government had evaluated two possible import mechanisms: using a state-owned enterprise (SOE) or establishing a BLU scheme.
According to Yuliot, each option carries different regulatory and financing implications. Using an SOE importer could create contractual complications with existing business partners and would likely require procurement through a tender process.
He said those requirements are considered less suitable for the proposed government-to-government cooperation model.
By contrast, the BLU mechanism is viewed as offering greater operational and financing flexibility, although the final regulatory framework is still being finalized.
On pricing, the government said purchases of Russian crude oil would continue to follow prevailing international market mechanisms. However, officials said the possibility of obtaining discounted prices remains open, although no details have yet been disclosed.
Editing by Reiner Simanjuntak