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Indonesia's Energy Industry

Indonesia

in figures

Oil reserves2.4 billion barrels

Oil production692,000 bopd

Gas reserves1.3 tcm

Gas production59.3 bcm

Eastern potential

Indonesia’s oil and gas industry is a key element in the country’s historic economic development. First oil was discovered in North Sumatra in 1883, which led to the establishment of super-major Royal Dutch Shell in 1890. Production of hydrocarbons continues to be a crucial part of the economy and is increasing in significance as reserves are gradually lowered and local consumption rises. Despite being Southeast Asia’s second largest economy, the government has struggled with making its upstream plays attractive to foreign investors in the modern era due to what are seen as protectionist policies and a history of corruption.

The OPEC member’s upstream and natural gas activities are overseen by SKK Migas. The task force has initiated an ambitious roadmap to shake up the industry and recoup its losses, attract investment and bring the industry back to its former peak in the 1990s. NOC Pertamina is the dominant player in the upstream sector, and has been joined by international players such as China National Offshore Oil Corporation, Total E&P Indonesia, ConocoPhillips, BP Tangguh and ExxonMobil Indonesia. The island nation’s prospective gas plays are mainly found on offshore basins that are not associated with its crude production. E&P operations on its coal bed methane and shale gas are being pushed by the state as a key economic lifeline for the nation.

Indonesia is a large player in the global LNG export market. In the 1990’s it accounted for one-third of international trade of the resource. However it has lost it market dominance due to a rise in LNG exports from competitors such as Qatar, Australia and the US. The country remains a significant regional supplier of LNG, with Japan, South Korea and China among its top buyers.

The Asian nation is also seeking investment in its downstream and midstream sectors. Indonesia boasts a large array of refineries. However, the country’s refining capacities are inefficient for its demand. Indonesia relies on imports to fulfil its petroleum usage. Pertamina owns and operates most of the country’s refining capacity. The country has no international pipelines for petroleum trade and maritime transport remains a crucial component of its energy value chain. State-run Perusahaan Gas Negara manages more than 90% of the country’s midstream infrastructure.

Indonesia incentivises oil and gas exploration
NEWS
Indonesia - September 21, 2023

Indonesia has changed its current oil and gas contract terms to incentivise participation in its upstream sector, including…

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Indonesia puts three oil and gas blocks on offer
NEWS
Indonesia - September 20, 2023

Indonesia has put three exploration blocks on offer in its third oil and gas bid round in 2023, Reuters reported on Wednesday.

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Sembcorp Industries signs Indonesian gas trade deal
NEWS
Indonesia - June 07, 2023

Sembcorp Industries has signed a USD 1.41-billion gas sales agreement with local independent Medco Energi Internasional to…

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Expansion outside the energy sphere TEY_post_Osman_Ibrahim
Interview
Saudi Arabia - May 29, 2023

Osman Ibrahim, vice-chairman and group CEO of Rawabi Holding, talks to The Energy Year about the company’s expansion and…

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Indonesia maps

Indonesia’s Exploration and Production Licence Areas 2020

ALL MAPS
Indonesia opens its first 2023 oil and gas bid round
NEWS
Indonesia - April 11, 2023

Indonesia has opened the first phase of its 2023 oil and gas bid rounds with three plays covering 17,800 square kilometres on…

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Rystad Energy predicts M&A bonanza in Southeast Asia
NEWS
Norway - March 28, 2023

Rystad Energy has predicted a rise in upstream M&As in Southeast Asia in the next two years based on more than USD 5 million in…

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BP signs 30-year PSCs in Indonesia
NEWS
Indonesia - June 22, 2022

Indonesia’s oil and gas industry is a key element in the country’s historic economic development. First oil was discovered in North Sumatra in 1883, which led to…

READ MORE
BW Offshore sells FPSO in Indonesia
NEWS
Indonesia - June 06, 2022

Indonesia’s oil and gas industry is a key element in the country’s historic economic development. First oil was discovered in North Sumatra in 1883, which led to…

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