Indonesia made its first oil discovery in North Sumatra in 1883, leading to the establishment of Royal Dutch Shell in 1890. In the 1990s, oil production peaked, …READ MORE
Oil reserves3.2 billion barrels
Oil production808,000 bopd
Gas reserves2.8 tcm
Gas production73.2 bcm
Indonesia made its first oil discovery in North Sumatra in 1883, leading to the establishment of Royal Dutch Shell in 1890. In the 1990s, oil production peaked, surpassing 1.6 million bopd. Since then, production steadily declined until the country finally became a net importer of oil in 2004, and left OPEC in 2008. In December 2015, the country re-entered OPEC, where it has sought a special status as a mediator with exemption from production cuts.
In December 2018, Indonesia had 3.2 billion barrels of proven oil reserves, down from 4 billion barrels at the beginning of 2013. Even with an aggressive offshore exploration programme and EOR, oil production has continued to decline as recent discoveries have yet to reach full capacity. Set to become the world’s seventh-largest economy by 2030, Indonesia’s appetite for more energy will undoubtedly continue to increase in the next decades and the local hydrocarbons industry will likely be unable to meet the demand.
In January 2017, the Ministry of Energy and Mineral Resources issued a regulation effectively replacing Indonesia’s cost recovery mechanism with a gross production split scheme for the sharing of hydrocarbons output between the contractors and government under upstream PSCs.
A large portion of Indonesia’s produced gas is exported as the nation’s gas production is dominated by foreign companies. CNOOC, Total E&P Indonesia, ConocoPhillips, BP Tangguh and ExxonMobil Indonesia are some of the major foreign players in the country.
With diminishing oil reserves, increasing domestic energy demands and vast, untapped conventional and unconventional gas wealth totalling 2.8 tcm (100 tcf), Indonesia is gradually reorienting its hydrocarbons industry. Supported by the government, gas production increased by 25% between 2002 and 2012. These gains were lost by 2014, but by 2018 production had increased to 73.2 bcm (2.58 tcf). The country has significant shale gas potential, which is being studied.
Jakarta has moved to reform its oil and gas industry, but long-term investment has been complicated by nationalistic overtures and legal barriers to exploration. Investor concerns over new energy regulations have raised questions about the future of the industry.
ConocoPhillips has agreed to sell its remaining Indonesia assets to local oil and gas player Medco Energi for $1.4 billion, the…READ MORE
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