Indonesia courts Korean capital with faster permits

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Indonesia courts Korean capital with faster permits

Published: 08 Apr. 2026, 16:41

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Anindya Novyan Bakrie, chairman of the Indonesian Chamber of Commerce and Industry [INDONESIAN CHAMBER OF COMMERCE AND INDUSTRY]

[INTERVIEW]

As recurring conflicts continue to disrupt the flow of Middle Eastern crude, Korea’s refiners have been moving decisively to curb their dependence on the region. And one of the most consequential initiatives has been exploring oil in Indonesian blocks.

Indonesia has pledged not only sustained incentives but also expedited approvals to support these efforts, said Anindya Novyan Bakrie, chairman of the Indonesian Chamber of Commerce and Industry.

“In 2025, Indonesia awarded five oil and gas blocks, including projects involving Korea’s SK Earthon, as part of a broader effort to improve energy security,” Bakrie said in a written interview with the Korea JoongAng Daily.

“To attract more Korean investment, what the private sector values most is not only incentives, but consistency on faster permitting, clearer commercial terms, infrastructure readiness, and confidence that projects can move from announcement to execution.”

SK Earthon, the upstream arm of SK Innovation, last year acquired a stake in Indonesia’s North Ketapang block, becoming its second-largest shareholder. Situated off the northeastern coast of Java, the block is widely regarded as a high-potential site for crude discovery.

Hyundai Motor Group Executive Chair Euisun Chung, center, inspects its battery plant in Karawang Regency, Indonesia. [HYUNDAI MOTOR]

Nearby areas have recently delivered successive discoveries from untapped formations beyond established reservoirs, highlighting significant additional reserve potential.

SK has also previously invested in the Serpang and Binaiya blocks in Indonesia.

Bakrie also emphasized that the nation is opening more space for partnership.

“Early-2026 reporting referred to around 75 new oil blocks, while March reporting said 10 blocks would be offered as part of a broader pipeline of 110 potential exploration areas,” he said.

“The broader point is that Indonesia wants faster execution, technology investment and strategic partnership between government and the private sector.”

The chairman also underscored the importance of partnerships with Korean firms in the EV and battery sectors, despite a broader downturn in the global clean-vehicle market.

Hyundai Motor in 2022 completed a $1.55 billion manufacturing plant in Bekasi, West Java, its first full-scale production site in Southeast Asia. Designed with an annual capacity of 150,000 units, the facility has operated at roughly half that level, a figure now expected to slip below 60,000 amid export disruptions to the Middle East and tariff headwinds in Mexico.

Sales have also been cut sharply, as competitively priced Chinese EVs flood the Indonesian market. Hyundai’s wholesale sales in January and February fell 30.2 percent on year to 3,166 units, with market share declining from 3.4 percent to 2.1 percent, according to the Indonesian Automotive Industry Association. Production has mirrored the slowdown, dropping 21.5 percent to 9,180 units.

By contrast, BYD, China’s leading EV maker, saw sales surge 279.3 percent to 9,532 units over the same period. New entrant Jaecoo quickly climbed to 7th place with 5,030 units.

“Indonesia still sees Hyundai as a strategic long-term partner, but the answer is not permanent protection, but a fair and predictable framework that rewards companies that localize production, build suppliers, train people, and export from Indonesia,” Bakrie said.

“Hyundai Motor Indonesia has publicly said its efforts to expand Indonesia’s EV ecosystem are backed by a $3 billion investment and strategic partnerships,” Bakrie added. “We support Hyundai, but we support it most strongly as an industrial partner helping to build the Indonesian EV ecosystem, not just selling into it.”

BY SARAH CHEA [[email protected]]