RI may become net oil importer in 10 years: BP Migas
Fitri Wulandari, The Jakarta Post, Jakarta
Indonesia could become a net oil importer in 10 years if there are no new finds and the public continues its lavish consumption of fuel oil, a senior official at a governmental agency warned.
Rachmat Sudibyo, chairman of oil and gas upstream regulatory body (BP Migas), said last week that in order to prevent the nation from becoming a net oil importer, exploration should be intensified and the public should switch to natural gas from oil.
The country needs new oil discoveries of between 400 million and 500 million barrels annually, which is the same amount of crude oil currently produced by the nation each year, Rachmat said.
"Every year, we need new crude oil discoveries equal to our current production rate to extend the lifespan of our oil reserves," Rachmat said.
Indonesia is the only Asian member of the Organization of Petroleum Exporting Countries (OPEC).
According to data from BP Migas, as of the end of 2003, Indonesia's proven and potential oil reserve stood at 9.75 billion barrels, which at the current rate would be enough for 20 years of production.
Indonesia now produces 1.081 million barrels per day.
Rachmat said that aside from boosting exploration for new oil reserves, the nation should also intensify its exploitation of aging oil fields. Such fields normally still contain oil but require advanced technology for its exploitation.
Reducing oil fuel consumption is also vital for Indonesia to remain a net oil exporter, Rachmat said.
He said 70 percent of the country's oil production was now used to produce fuel products. Fuel oil consumption for transportation, electricity, industry and household use in 2003 reached 54.7 million kiloliters.
The Energy Information Center at the Ministry of Energy and Mineral Resources said fuel oil consumption had been in decline since the government began to phase out the fuel subsidy.
Three years before the 1997 financial crisis, fuel oil consumption was growing by an average of 10 percent. From 1998 to 2000, when the government began to phase out the fuel subsidy, fuel oil consumption grew just above 7 percent.
The government still subsidizes fuel oil sold for household use, transportation and certain industries, keeping the retail price of the fuel oil at 75 percent of market price. For the mining and oil industries and their supporting and processing industries, fuel is sold at market price.
This year, the government has allocated Rp 14. 5 trillion for fuel subsidies. Last year, it allocated Rp 13.2 trillion, but the realized figure was Rp 26.02 trillion.
The Energy and Information Center says if fuel oil subsidies can be further reduced to "minimum levels", the annual growth of fuel oil consumption could be cut to 5 percent. It does not, however, specify what this "minimum level" is.
Promoting the use of natural gas by the public is the best way to reduce the nation's dependency on fuel oil, Rachmat said.
The government is gearing up to increase the domestic supply of natural gas. Indonesia produces an average of three trillion cubic feet of natural gas annually. Only 35 percent is used for domestic needs, with the remaining 65 percent exported in the form of liquefied natural gas (LNG) and through pipelines. Indonesia is the world's largest LNG exporter with annual exports of more than 30 million tons per year.
There are currently several projects to construct natural gas transmission pipelines to connect natural gas reserves with the market, particularly in the heavily populated Java.