Energy
From The Report: Indonesia 2012
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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.

Articles from this Chapter

Overview

Mixing it up: New acquisitions and expansions in hydrocarbons and electricity are changing the landscape of the sector
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2025, Indonesia’s primary energy mix should contain 33% coal, 30% natural gas, 20% crude oil, 5% each of biofuels, geothermal and other renewable sources, and 2% liquid coal. CALLING THE SHOTS: Created in 2001 to take over the role of regulator from state-owned oil and gas company Pertamina when it was incorporated as an limited liability company, the Executive Agency for Upstream Oil and Gas Activity (BPMIGAS) is in charge of supervising and establishing cooperation contracts or production…

Interview

Evita Legowo, Evita LegowoDirector-General, Oil and Gas Directorate, Ministry of Energy and Mineral Resources: Interview
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Interview:Evita Legowo How does the ministry stimulate investment, especially in more remote areas of the country? EVITA LEGOWO: Investors searching for new opportunities in the oil and gas industry not only look at the hydrocarbons potential of the country, but also aspects such as regulatory stability and investment environment. The eastern part of Indonesia has been noted as a region with high potential reserves, but gaining access to these reserves entails high costs, high technology…

Analysis

Gassing up: A renewed focus on producing for domestic consumption
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In contrast to crude oil production, Indonesia’s natural gas output has been on the rise each year since 2007. Total gas production in 2010 amounted to 3.28bn standard cu feet per day (scfd), up 8.4% on the previous year’s mark of 3.02bn scfd and 16.8% over the 2.81bn scfd in 2007, according to Indonesia’s Directorate General of Oil and Gas (DGOG). According to the “BP Statistical Review of World Energy” published in June 2011, Indonesia had proven natural gas reserves of 108trn…

Interview

Jim Taylor, President Director, ConocoPhillips; Sammy Hamzah, CEO, Ephindo; Terry McPhail, President & General Manager ExxonMobil; and Hilmi Panigoro, President Commissioner, Medco
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Interview:Jim Taylor,Sammy Hamzah,Terry McPhail,Hilmi Panigoro How would you characterise the government’s plan to develop the energy mix and reduce the country’s dependence on oil and gas? SAMMY HAMZAH: Our industry is a very dynamic one where continuous evolution takes place and where the implementation of a sustainable long-term energy policy is complex. The aim is to increase the use of alternative sources of energy such as geothermal, hydropower and coal bed methane…

Analysis

Into the deep: Firms see greater potential in coal bed methane extraction
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On March 25, 2011 the Sangatta West project in East Kalimantan was the first dedicated coal bed methane (CBM) well in Indonesia to successfully release gas trapped approximately 830 metres below the surface. The implications of this milestone go far beyond the relatively small amounts of methane gas released from test well SCBM#1, as the country is estimated to house an estimated 453trn cu feet of the gas. SIGNIFICANT EFFECTS: With more than four times as much estimated natural gas than all…

Analysis

Natural potential: Laying plans for the development of renewables
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Within its vast territory, Indonesia contains enough renewable energy sources to enable the country to more than quadruple its current power-generating capacity. According to data from the Directorate-General of New and Renewable Energy and Energy Conservation (EBTKE), the combined renewable energy potential of Indonesia’s hydro, geothermal and biomass resources amounts to around 155.28 GW. This is divided into large hydro, with a potential of 57.67 GW, biomass with 49.81 GW, geothermal with…