RI may become an oil importer as output slides<\/p>\n
Claire Leow and
\nGrace Nirang
\nBloomberg\/Jakarta<\/p>\n
Indonesia, Southeast Asia's only OPEC member, may become a net
\noil importer this year as projects led by ConocoPhillips, Unocal
\nCorp. and PetroChina Co. fail to stem falling output, helping to
\nboost fuel prices to records.<\/p>\n
The country may turn to importing a net 61,000 barrels a day
\nthis year from net exports of 27,000 barrels a day in 2004, based
\non figures in a document prepared for the Energy and Mineral
\nResources Ministry and obtained by Bloomberg.<\/p>\n
Indonesia is draining oil from global markets at a time when
\nChina's soaring demand helped to push prices to a record US$58.28
\na barrel on April 4. To revive exports, President Susilo Bambang
\nYudhoyono must resolve contract disputes that have curbed
\nspending by companies including Exxon Mobil Corp.<\/p>\n
\"Without new investments, Indonesia will this year probably
\nend up as a net importer of oil,\" Wahyudin Yudiana Ardiwinata,
\n55, chief executive of ChevronTexaco Corp.'s local unit, PT
\nCaltex Pacific Indonesia, said in an interview on Wednesday in
\nJakarta.<\/p>\n
Caltex pumps half of Indonesia's oil.<\/p>\n
Global oil prices have reached records because of limited
\nspare output capacity among OPEC's members and increased demand
\nfrom China, whose imports have risen over the past decade from
\nzero to 41 percent of local consumption. Domestic production has
\nfailed to keep pace with demand that more than doubled to about
\n6.38 million barrels a day in 2004.<\/p>\n
In Indonesia, projects led by ConocoPhillips, Unocal and
\nPetroChina won't produce as much oil as expected this year, the
\nenergy ministry document said.<\/p>\n
Oil imports in 2005 may jump 15 percent to 472,000 barrels a
\nday, while exports are likely to drop 6 percent to 411,000
\nbarrels a day. Last year, exports were unchanged at 437,000
\nbarrels a day, as imports climbed to 410,000 barrels a day from
\n362,900 barrels a day.<\/p>\n
Indonesia's production of oil and condensates slid to 1.1
\nmillion barrels a day in February from 1.67 million barrels at
\nits peak in 1976-1977.<\/p>\n
Meantime, Exxon, the world's biggest publicly traded oil
\ncompany, may stall development of Cepu, Indonesia's largest
\nuntapped oil deposit, for a fourth year because the state oil
\ncompany, PT Pertamina, is demanding a bigger stake before
\nextending a project license.<\/p>\n
Exxon's dispute is among the factors that cut oil exploration
\nspending to a 23-year low, or less than $500 million in 2004,
\naccording to the Indonesian Petroleum Association's data.<\/p>\n
Another reason: ChevronTexaco and the association's 39 other
\nactive members want payment of about $200 million in refunds for
\nvalue-added tax going back as far as 2001, disrupting budgets and
\nundermining confidence in the administration.<\/p>\n
Oil and gas last year accounted for 26 percent of the
\nSoutheast Asian country's export revenue, which rose 15 percent
\nto $11.8 billion on higher international prices, according to
\nBPMigas, the state oil and gas regulator.<\/p>\n
Lower production this year could cut government revenue as it
\nstrives to trim a budget deficit that's forecast to continue each
\nyear until 2008.<\/p>\n
\"Oil and gas is a particularly tough one -- if it's not sound,
\nit's bad for the budget,\" William Wallace, lead economist for the
\nWorld Bank in Jakarta, said in a telephone interview. \"Also for
\nthe investors.\"<\/p>\n
Exxon's Cepu deposit in central Java may have hold about 500
\nmillion barrels of oil, according to the energy ministry. The
\nfield could produce 170,000 barrels a day, Budiono, vice
\npresident for exploration at Exxon's Indonesian unit, told a
\nparliamentary hearing on Feb. 17.<\/p>\n
Before that, Exxon and Pertamina must resolve a dispute that
\nhas festered through three Indonesian presidencies since 2001.<\/p>\n
That year, parliament enacted a law to bring an end to the
\ntype of so-called technical assistance contract that gave Exxon a
\nlicense until 2010 to develop Cepu with Pertamina. Exxon's
\nrequest for a 20-year extension of its right to 20 percent of any
\noil produced from Cepu was refused by the government in 2003.<\/p>\n
A counter-offer by Pertamina for Exxon to pay $85 million and
\ngive up its right to two neighboring fields in exchange for the
\nCepu extension was retracted in August last year, when the
\ngovernment appointed new directors at the state oil company.<\/p>",
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