Jakarta. American oil giant ExxonMobil has agreed to invest up to $15 billion for carbon capture and storage or CCS as well as a petrochemical refinery in Indonesia.

The company and the Indonesian government inked a memorandum of understanding (MoU) on the project in Jakarta on Wednesday. 

Senior minister Airlangga Hartarto told reporters that ExxonMobil’s petrochemical investment would support Indonesia’s push for value-added processing. The petrochemical facility is set to produce plastic. The CCS -- which captures emissions from industrial processes and stores them deep underground in geological formations -- will help Indonesia move the needle on sustainability.

“This project is expected to deliver a significant impact on various sectors in Indonesia. … It will create jobs and show the commitment to sustainability. This CCS technology is capable of absorbing 90 percent of the emissions [from industrial sources],” Airlangga said, shortly after the deal signing.

Airlangga’s aide Susiwijono Moegiarso revealed later that day that the initial investment would stand at around $10 billion before it finally totals $15 billion for both projects.

CCS facility is expected to store 3 million tons of carbon dioxide. Susiwijono claimed that it would also be the first large-scale CCS facility in Indonesia once operational. ExxonMobil has yet to decide on the location of both facilities. ExxonMobil is mulling setting up the CCS somewhere in the Sunda-Asri basin in the Java Sea. They are also still trying to find the best location for the petrochemical refinery, although it is likely to be situated on Java island.

“ExxonMobil is looking for a 500-hectare land for the petrochemical industry. We have some options around Java Island. Because they want the facility to be only 100 kilometers away from the CCS facility,” Susiwijono said.

The Indonesian government and ExxonMobil will also set up a joint task force to make sure everything goes well without a hitch. 

Former President Joko “Jokowi” Widodo had previously hinted at ExxonMobil’s investment. In 2023, Jokowi met with ExxonMobil chairman Darren Woods in San Francisco. The two-term leader revealed that ExxonMobil was considering pumping $15 billion into a green petrochemical refinery and a CCS project in Indonesia. Jokowi at the time even claimed that the CCS facility would be the largest of its kind in Southeast Asia.

The government reported that Indonesia recorded $2.8 billion in foreign direct investment from the US in January-September 2024. This made the US as Indonesia’s fourth-largest source of FDI.