Indonesia is at a turning point in its energy development. The country is looking to reverse years of declining production and investment in the oil and gas sector through new exploration contracts, the development of potentially vast offshore reserves, and acquisitions. Dozens of new contracts have been signed since 2008, however, including 11 new production-sharing contracts in November 2011 worth over $200m. Several new working areas have also been approved, with a number of the fields primarily containing natural gas. In the electricity sector, demand is increasing due to a growing, ever-wealthier population. With electrification rates at only 67% and the replacement of biomass with electric energy sources, the country is looking at nearly 10% annual growth. Indonesia will look to meet this demand by deploying a number of cheap coal-fired power plants, which will draw on vast domestic supplies.
This chapter contains interviews with Evita Legowo, Director-General, Oil and Gas Directorate, Ministry of Energy and Mineral Resources; Karen Agustiawan, President Director, Pertamina; and a roundtable with Jim Taylor, President Director, ConocoPhillips; Sammy Hamzah, CEO, Ephindo; Terry McPhail, President & General Manager, ExxonMobil; and Hilmi Panigoro, President Commissioner, Medco.