Indonesia is a country with a vast energy infrastructure combined with some serious energy needs.
This was the message given by Tubagus Haryono, head of BPH Migas’ downstream regulatory body agency, at the recent Offshore Technology Conference. Speaking to a luncheon gathering May 4, Haryono said that Indonesia’s oil and gas industry is characterized by high risk, high capital demands, and high technology.
The country overall consumes about 1 MMbbl/day of hydrocarbons for industrial feedstock and domestic fuel needs and currently produces somewhat less than that. It has about 7.7 Bbbl of oil in reserves. One of the key issues is that, of the country’s 2.4 million people, 124 million of them live on the island of Java.
It also has 157 Tcf in reserves of gas and in fact produces more gas than oil. The gas reserves are 3.5 times that of the oil reserves, but they’re scattered. Currently an LNG plant in Kalimantan exports gas to other markets.
Most of the country’s reserves are offshore and are experiencing a very gradual decline. With this scenario in mind, Haryono said, the country hopes to encourage new investors to come to Indonesia to explore. Already there are three major deepwater projects in the works that will be coming onstream between 2014 and 2018. But they will face challenges, including water depth, high pressure, complex geology, and distance from infrastructure.
However, opportunities exist as well. The offshore has a big upside potential, and there are good incentives and strong government support. There’s also currently little competition, and the leases are controlled by the central government, not the local governments.
The country has identified several transportation projects that will help the country better meet its energy needs. It is planning to tie natural gas from Kalimantan to Java by pipeline, and it’s building a pipeline from East to West Java. There are also three projects for LNG receiving terminals on the drawing board. The country also intends to bring gas from a Petronas-operated field to supply electricity, and it’s currently exporting gas from Sumatra and Natuna to Singapore, with eventual hopes of building a pipeline across Kalimantan to Natuna.
Indonesia’s targets for 2025 are to maintain production of 1 MMbbl of oil per day, maintain security of supply, have 91% of the energy industry manned by local content, supply 99% of the skilled workers, and have a spotless HSE record. From the standpoint of potential foreign investors, the country offers great opportunities, high potential for unconventional reserves, and government goodwill in balancing national and investment interests, Haryono said.
“Don’t hesitate to invest your money in Indonesia,” he said.
2024-01-11 - Chesapeake Energy and Southwestern Energy's merger will create dominant positions in Appalachia and the Haynesville Shale, which the companies say would compete on the global stage.
2023-12-20 - Kodiak Gas Services and CSI Compressco said they will have the largest contract compression fleet in the industry, with more than half of its horsepower serving the Permian Basin.
2024-01-16 - Moda, backed by EnCap Flatrock Midstream, sold its joint venture interests in the terminal to Madrid’s Exolum.
2024-01-22 - Sunoco LP is adding scale and diversifying its portfolio with its acquisition of NuStar Energy LP, which is expected to close in second quarter 2024.
2024-01-04 - APA Corp.’s deal adds Callon Petroleum’s 120,000 Delaware Basin acres and continues a rash of Permian Basin M&A seen in 2023.