Investment in oil still promising: Abda'oe
Investment in oil still promising: Abda'oe
JAKARTA (JP): Investment opportunities in upstream oil exploration and production remain promising, especially in the eastern parts of Indonesia.
The president of state-owned oil company Pertamina, Faisal Abda'oe, said that only 36 out of the country's 60 sedimentary basins have been explored.
Most of the unexplored basins are located in the country's eastern provinces.
The 60 sedimentary basins are estimated to contain hydrocarbon resources of about 66 billion barrels of oil and 266 trillion standard cubic feet of natural gas.
"In addition, only 14 of the 24 basins with proven reserves have been developed," Abda'oe told some 600 foreign and local businesspeople at an international seminar on Indonesia's economy last week.
Fresh funds
He said that oil exploration must be intensified, not only to replace depleting oil and gas reserves but also to add new proven reserves.
The production of crude oil, he said, has to be maintained at 1.5 million barrels per day to prolong "the country's status as an oil exporter and to delay the possibility of Indonesia becoming a net oil importer."
Abda'oe said that investment opportunities in downstream oil- based industrial ventures also remain promising, given the sharp increase in domestic demand for refined oil products.
He said Indonesia will need about US$8 billion in fresh funds to boost the production capacity of its existing refinery plants in the next five to 10 years.
In his speech at the two-day seminar, Abda'oe said domestic demand for petroleum-based fuels will increase to 54 million kiloliters, equivalent to 337 million barrels of oil, in 1999 from 44 million kiloliters, or 278 million barrels, in 1996.
He estimated the annual supply for refined fuels on the domestic market is expected to experience a shortage of about 44 million barrels of oil by 1999.
"It means that Indonesia has to boost its refining capacity to meet the shortage," he said.
The growing demand for petroleum products at home is estimated to slash Indonesia's exports of crude oil by 15 percent to 263 million barrels per annum in 1999 from 301 million barrels last year.
Abda'oe said the country's exports of petroleum-based products would most likely drop by 30 percent to 37 million barrels in 1999 from 53 million barrels last year.
He, however, said that the increase in natural gas production is expected to push up exports of liquefied natural gas to 28 million tons in 1999 from 25 million tons last year.
Liquefied petroleum gas exports are also projected to record a moderate increase to 2.7 million tons in 1999 from 2.5 millions in 1995.
According to Pertamina, Indonesia's proven oil reserves are estimated at 9.5 billion barrels, with a production capacity of 1.6 billion barrels per day in 1996.
Gas reserves are estimated at 114.8 trillion standard cubic feet while current production capacity is about eight billion cubic feet per day.
Abda'oe said that the country's refining capacity, which was only 77,000 barrels of crude per day in 1969, has now reached 990,000 barrels per day. (hen)