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Source: The Jakarta Post,
12 January
2004 by Fitri Wulandari,
Indonesia could
become a net oil importer in 10 years if there are no new finds and the public
continues its lavish consumption of fuel oil, a senior official at a
governmental agency warned. Rachmat Sudibyo, chairman of oil and gas upstream
regulatory body (BP Migas), said last week that in order to prevent the
nation from becoming a net oil importer, exploration should be intensified
and the public should switch to natural gas from oil.
The country needs new oil discoveries of between 400 million and 500 million
barrels annually, which is the same amount of crude oil currently produced by
the nation each year, Rachmat said. "Every year, we need new crude oil
discoveries equal to our current production rate to extend the lifespan of
our oil reserves," Rachmat said. Indonesia is
the only Asian member of the Organization of Petroleum Exporting Countries
(OPEC).
According to data from BP Migas, as of the end of 2003, Indonesia's
proven and potential oil reserve stood at 9.75 billion barrels, which at the
current rate would be enough for 20 years of production. Indonesia now
produces 1.081 million barrels per day. Rachmat said that aside from boosting
exploration for new oil reserves, the nation should also intensify its
exploitation of aging oil fields. Such fields normally still contain oil but
require advanced technology for its exploitation. Reducing oil fuel
consumption is also vital for Indonesia to
remain a net oil exporter, Rachmat said.
He said 70 percent of the country's oil production was now used to produce
fuel products. Fuel oil consumption for transportation, electricity, industry
and household use in 2003 reached 54.7 million kiloliters. The Energy Information Center at
the Ministry of Energy and Mineral Resources said fuel oil consumption had
been in decline since the government began to phase out the fuel subsidy.
Three years before the 1997 financial crisis, fuel oil consumption was
growing by an average of 10 percent. From 1998 to 2000, when the government
began to phase out the fuel subsidy, fuel oil consumption grew just above 7
percent.
The government still subsidizes fuel oil sold for household use,
transportation and certain industries, keeping the retail price of the fuel
oil at 75 percent of market price. For the mining and oil industries and
their supporting and processing industries, fuel is sold at market price.
This year, the government has allocated Rp 14. 5 trillion for fuel subsidies.
Last year, it allocated Rp 13.2 trillion, but the realized figure was Rp
26.02 trillion. The Energy and Information Center says
if fuel oil subsidies can be further reduced to "minimum levels",
the annual growth of fuel oil consumption could be cut to 5 percent. It does
not, however, specify what this "minimum level" is. Promoting the
use of natural gas by the public is the best way to reduce the nation's
dependency on fuel oil, Rachmat said.
The government is gearing up to increase the domestic supply of natural gas. Indonesia
produces an average of three trillion cubic feet of natural gas annually.
Only 35 percent is used for domestic needs, with the remaining 65 percent
exported in the form of liquefied natural gas (LNG) and through pipelines. Indonesia is
the world's largest LNG exporter with annual exports of more than 30 million
tons per year. There are currently several projects to construct natural gas
transmission pipelines to connect natural gas reserves with the market,
particularly in the heavily populated Java.
Source:
http://www.aseanenergy.org/information/news_service/2004/january/34th_issue/news_05.htm
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