Once Southeast Asia’s largest crude producer, Indonesia withdrew from the Organisation of Petroleum Exporting Countries (OPEC) in 2008 after drop in its output turned the oil exporter into a net importer.
Now, the country looks set to reviving its declining crude oil reserves, which is put at about 3.6 billion barrels as most of its oil and gas supplies are almost exhausted and increased consumption cannot be sufficiently overcome by the country’s production, according to a govern¬ment official.
“Most of our oil and gas supply is almost exhausted but we have been acting so far as if we still had a lot of oil and gas resources,” Gde Prad¬nyana, secretary of the Upstream Oil and Gas Regulator Special Task Force was quoted by Indonesia’s ANTARA News as saying.
Noting that the volume of the country’s oil and gas reserves is very limited, he stressed the need to make an all-out campaign for intensive exploration to increase the existing reserves.
Exploration activity in the country is facing three major obstacles, namely licensing, taxation and legal
¬certainty, he pointed out. “Taxation remains unsettled, while licensing is the matter of bureaucracy and thus investors are required to go through around 281 kinds of licensing before starting to invest in Indonesia.”
It was recently reported that Italian oil major Eni is planning to raise investment levels in Indonesia. Eni has invested about $400 million in Indonesia since 2001 and has developed 13 blocks nationwide and the company holds promise for more blocks.
Indonesia’s oil production peaked in 1976 and, after fluctuating for two decades, started to decline in 1995 because of ageing fields and a lack of investment. It became a net oil importer in 2005. Whether the coun¬try would reverse its dwindling oil and gas fortunes only time will tell but then Indonesia should be a lesson for oil producing countries that hydrocarbon resources are exhaustible.
