April 1, 2026
JAKARTA – Japan is seeking to work more closely with Indonesia on energy security, Prime Minister Sanae Takaichi said, as global concerns over supply disruptions intensify amid escalating geopolitical tensions.
“In light of the Iran situation, the strategic importance of resources and energy security is once again being recognized globally. Indonesia is a major resource-rich nation,” Takaichi said alongside President Prabowo Subianto after bilateral talks in Tokyo on Tuesday, as quoted by Reuters.
Her remarks set the tone for a series of agreements signed during Prabowo’s visit, where Jakarta and Tokyo inked 10 memoranda of understanding (MoUs) and strategic business deals worth a combined US$23.63 billion.
The agreements were announced at the Indonesia-Japan Business Forum held at the Imperial Hotel Tokyo on Monday, spanning a wide range of sectors such as clean energy-based downstream projects, oil and gas exploration, geothermal development and financial inclusion.
Prabowo’s visit took place amid escalating tensions in the Middle East that have disrupted oil and gas flows through the Strait of Hormuz. Japan has moved to safeguard supplies by ramping up coal use, tapping oil reserves and seeking alternative sources.
Indonesia remains a key partner, as the world’s largest thermal coal exporter and a major LNG supplier, with about a quarter of its shipments bound for Japan.
During the summit, both countries also pledged to push for deescalation in the Middle East, to “would make their best efforts to convince all parties to deescalate,” Prabowo said, while also inviting greater Japanese participation in Indonesia’s economy, including in critical minerals, rare earths, industrialization and nuclear energy.
“If there’s a real partnership between the Japanese economy, Japanese industry and Indonesia, both our peoples will benefit. When both our peoples benefit, this will be a pillar of peace and stability,” Prabowo said at the event on Monday.
A significant portion of the agreements made during Prabowo’s official visit focused on energy cooperation, particularly with the Japanese firm INPEX.
These include a strategic partnership between state-owned energy firm Pertamina and INPEX for the development of the Abadi Gas Field in the Masela Block, as well as an MoU between PT Pertamina Hulu Energi and INPEX to explore upstream oil and gas opportunities in Indonesia and Southeast Asia.
Another agreement involves PT Supreme Energy Rajabasa and INPEX, focusing on studies to advance the Rajabasa geothermal power plant project, underscoring Indonesia’s ambition to expand its renewable energy capacity.
Energy and Mineral Resources Minister Bahlil Lahadalia said he had been directly instructed by President Prabowo to ensure progress on both the energy transition and long-delayed Masela Block project.
He noted that the Masela project has now reached a major milestone after decades of uncertainty. The project’s development plan carries a base value of around $20 billion, with an additional $1 billion allocated for carbon capture and storage (CCS) technology to make it more environmentally friendly.
“Under the President’s directive in 2025, we held intensive meetings and, thankfully, they have now been completed,” Bahlil said on Monday. “However, given current geopolitical developments, the cost will most likely increase.”
Beyond fossil fuels, Indonesia is also stepping up efforts to diversify its energy mix.
“With the current geopolitical situation, we never know when it will end. So whether it’s geothermal, hydropower, solar or wind, as long as the technology is available and cost-efficient, we will promote it,” Bahlil said.
Other agreements signed during the forum on Monday include a methanol production project utilizing CO2 emissions from facilities that belong to state-owned fertilizer firm Pupuk Kaltim in Bontang, East Kalimantan, PT Pupuk Kalimantan Timur and PT Kaltim Methanol Industri, which are owned by Japanese firm Sojitz Corporation.
There was also an MoU between the Indonesian Chamber of Commerce and Industry (KADIN) and the Japan Chamber of Commerce and Industry covering trade, commerce and investment cooperation.
In the technology sector, PT Eblo Teknologi Indonesia and Hayashi Kinzoku Co., Ltd. agreed to collaborate on semiconductor ecosystem development, chip design and manufacturing, as well as artificial intelligence.
Other deals cover the financial sector, with state-owned pawnshop PT Pegadaian signing a deal with PT Bank SMBC Indonesia to strengthen Indonesia’s gold ecosystem and promote financial inclusion, while Danantara, Mandiri Investment Management and SMBC Aviation Capital agreed to establish the Mandiri Aviation Leasing Fund.
Additional agreements include cooperation between JETRO and PT Danantara Investment Management, as well as a geothermal power project in Hululais between the Indonesian government and JICA.
Separately, Indonesia’s Tourism Minister Widiyanti Putri Wardhana also signed a memorandum of cooperation (MoC) with Japan’s Minister of Land, Infrastructure, Transport and Tourism (MLIT), Yasushi Kaneko, to strengthen tourism ties. The agreement includes joint tourism promotion, training and knowledge exchange, as well as private sector collaboration in the aviation and travel industries.