Indonesia may become net oil importer in 10 years

JAKARTA (JP): Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Saturday that Indonesia would become a net oil importer in 10 years time as there were only five billion barrels left in the country's oil reserves.

He said that with the current production rate of 1.5 million barrels a day, in 10 years time Indonesia would run out of oil unless a new source was found.

"Even now Indonesia is already importing oil for its refineries," Purnomo said in a speech read by his expert staff, Hardi Prasetyo, Antara reported from Semarang, Central Java.

The speech was read at a seminar organized by Diponegoro University in Semarang on Saturday.

Even though Indonesia is known as an oil producing country, it still imports some of the fuel because the country's crude oil is not suitable for its refinery plants.

He said subsidies provided by the Indonesian government for oil had made oil prices in the country far cheaper than in other member countries of the Association of Southeast Asian Nations (ASEAN).

The difference in domestic and international oil prices only encourages oil smuggling, and allows people to squander the resource, Purnomo said, adding that squandering would force the country into importing oil much sooner than expected.

Fuel subsidies, which in the 2000 fiscal year are expected to total Rp 44 trillion (about US$5 billion), have so far been beneficial only to export oriented industries and the wealthy, rather than to the needy to whom they were originally intended, he said.(10)