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)