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IndonesiaEnergy reportApril 2008
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April 2008 Oil & Gas Financial Journal • www.ogfj.com www.focusreports.net 69
This supplement was produced by Focus Reports LLC. For more
information and exclusive interviews, log on to www.focusreports.net.
Project Director: Ines M NandinText and research: Robert Murillo
IndonesiaAfter 100 years of oil and gas
activity, Asia’s only member of
the Organization of Petroleum
Exporting Countries (OPEC) and inventor of the
Production Sharing Contract (PSC) finds its oil
and gas sector at a crucial turning point. Indone-
sia, a pioneer and a long-time leading exporter
in the LNG market is certainly not a newcomer
on the international scene. Yet, after years of
internal and external challenges and fundamen-
tal transformations, in 2004 the country became
a net importer of oil for the first time in its
history as increased domestic consumption was
met with falling production. But the time has
come to set in motion a change in the country’s
energy basket, with the objective of re-balanc-
ing the share of its oil and gas sectors and to
allow for new sources of power from biofuels to
geothermal through to possibly nuclear energy
to find their place in the country’s future.
Once a net exporter of petroleum, Asia’s only OPEC member seeks to increase production and to diversify its energy sector by generating power from other energy sources such as biofuels and geothermal.
Shaping a competitive
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70 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
“Indonesia is strategically located between two oceans and
continents that are of vital importance in today’s energy geopolitics,”
says Purnomo Yusgiantoro, Indonesia’s Minister of Energy and Mineral
Resources. “Oil from the Middle East must pass through Indonesia
before reaching the Far East markets, and the country is also well
connected to fast-growing giants China and India and energy-rich Aus-
tralia. Moreover, Indonesia itself is an important energy producer, with
substantial production of oil, gas and coal.”
Minister Purnomo recognizes the
challenges Indonesia’s energy sector
is facing but believes his country still
is in a favorable position.
Production of oil and condensate
in the period 2001-2004 declined
year on year due to a natural
maturing of its producing oil fields
combined with a slower reserve
replacement rate and years of
decreased exploration and invest-
ments. In 2006, oil production was
around 400 million barrels of oil
equivalent (boe), while the domestic
demand was up to 500 million boe,
forcing the country to import 100 million boe to cover the deficit.
This situation has continued into 2007 and is likely to intensify in
the years to come, due to booming domestic demand and a lack of
significant oil and gas discoveries in the country. Considering soaring
oil prices and the Indonesian government’s generous fuel subsidy –
despite recent reductions – this could constitute a heavy burden on
the state budget.
Nevertheless, Minister Purnomo is quick to point out that invest-
ment in E&P activities has picked up over the last several years, and he
believes that has a lot to do with the passing of new laws and regula-
tions for the sector.
“Our investment estimate for the total year 2007 is of about US$18
billion in the O&G sector, and there are already US$44 billion commit-
ted for projects over the coming years” he adds. As most of Indone-
sia’s oil and gas production comes from aging brown fields, a good
deal of the investments will have to be made in developing enhanced
oil recovery (EOR) in order to maintain production levels or to avoid a
rapid decline.
Achieving the government’s production objectives for the coming
years will also require the exploration and development of new fields
in Indonesia’s frontier regions. The President of the Indonesian Geolo-
gists Association (IAGI), Achmad Luthfi, echoes other experts’ view
that the country is still very prospective geologically for oil and gas
discoveries in its many unexplored basins.
“Everyone knows about the oil and gas fields developed in western
Indonesia, but geology shows that the future lies in exploring eastern
areas, including deepwater basins,” says Mr. Luthfi, who is also Deputy
Chairman for Planning of BP Migas, Indonesia’s upstream regulator. Of
the estimated 60 oil basins in Indonesia, only 22 have been extensively
explored, and this has been carried out mostly in western parts of
the country (the bulk of oil reserves are located onshore and offshore
central Sumatra and Kalimantan). The government hopes that eastern
parts of the country and deep sea areas may contain sizeable oil
reserves, which is why it is actively
encouraging exploration and devel-
opment activities in regions like
South Sulawesi and Papua.
Indonesia’s place within OPEC
may well depend on the country’s
capacity to increase oil output in
order to at least stop the growing
rate of reliance on imports for its
domestic energy needs. Indone-
sia’s current Governor for OPEC,
Maizar Rahman, had to go to great
lengths in 2005 in order to convince
disgruntled sectors of the political
landscape that it still made sense for a country that had become net
importer of oil to remain a part of OPEC and have to make the annual
contributions associated to it.
In the end, the government decided to remain in the oil cartel
primarily for political and strategic reasons and because, according to
Mr. Rahman, the other OPEC members expressed their support for
Indonesia’s continued presence in the organization.” It is important for
them to have diversity in its membership,” affirms Mr. Rahman, adding
that the traditional role as mediator that Indonesia has played is highly
appreciated by its members.
Towards a new energy mixAs the country’s oil production has decreased in recent years and
imported fuel has become more expensive, Indonesia has attempted
to shift towards using its vast natural gas resources for its own power
generation needs. Gas reserves at approximately 187 trillion standard
cubic feet (tscf) are equivalent to three times the country’s oil proven
and probable reserves of 8.9 billion barrels. Moreover, natural gas
is becoming a more competitive source for energy generation as
fuel subsidies are gradually phased out. Minister Purnomo and the
Indonesian government are confident about Indonesia’s gas potential
“because the reserves are there, what is essential is obtaining the
massive investments necessary for the infrastructure projects that will
make it all possible.”
Important new LNG projects are in development in the country.
The BP-led Tangguh LNG project in Papua – Indonesia’s third LNG
project after those in Bontang and Arun – is in advanced stages of
construction and set to commence production by 2009. Its two trains
are expected to produce at least 7.6 million metric tons of LNG per
year, enabling Indonesia to service new markets like China and the
United States. A fourth, though smaller, LNG project is under construc-
tion in Sulawesi and will be operated by state-owned Pertamina and
Medco, an emerging Indonesian oil and gas company.
In light of these projects and the country’s long history and exper-
tise in LNG, the government is considering the construction of LNG
receiving terminals in Java, by far Indonesia’s most populated and
industrialized island, in order to address domestic energy needs.
The government has set the priority for domestic use of natu-
ral gas, while at the same time trying to respect the share of gas
exported, currently over 50% of the total production, to its main mar-
kets of Japan, Korea, and Taiwan. How this policy will have an impact
on Indonesia’s leadership on exports of LNG is anybody’s guess, and
Purnomo Yusgiantoro, Indonesia’s Minister of Energy and Mineral Resources
Maizar Rahman, Indonesia’s current Governor for OPEC
PerRed_OGFJ_0804 1 3/10/08 5:00:46 PM
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72 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
it is being closely monitored by emerging producers such as Qatar,
Australia, Malaysia, and Algeria.
While oil and gas remain the primary source of energy for Indo-
nesia’s growing population and developing economy, with 52% and
29% respectively of the total energy mix, an even more fundamen-
tal policy shift is taking place towards other forms of power. The
Indonesian government has elaborated a target scenario for the
energy basket in 2025 in which oil falls to only 20% of the blend,
coal more than doubles its contribution to account for 33%, gas
edges up slightly to over 30% (though in absolute terms this means
a substantial increase), and geothermal and biofuels each contribute
with about 5% of the total amalgam. The remaining 7% would be
completed by a combination of biomass, hydro, solar, coal liquefac-
tion, and possibly nuclear energy.
These energy consumption targets were one of the main ele-
ments established by the New Energy Law passed by the govern-
ment in 2007, which constitutes Indonesia’s first effort to provide
a general framework for managing the country’s energy resources.
The new law also creates a National Energy Council that will be
responsible for establishing a concerted energy policy among the
main instances within the government.
William Deertz, leader of
international auditor PriceWater-
houseCoopers (PwC) Indonesia’s
Energy, Utilities and Mining
(EU&M) practice, sees this devel-
opment as a “positive step for
the country’s resource sector as it
will put into place a structure for
ensuring appropriate optimisation
of its natural resources.” He adds,
“The establishment of concrete
energy consumption targets for
the economy should provide
policy-makers a framework when
assessing alternative policies.”
Fine-tuning the regulatory frameworkThe basic premise underlying the oil and gas industry in Indonesia is
established in the Constitution of the Republic of Indonesia promul-
gated in 1945. Article 33 states that “all the natural wealth on land
and in the waters is under the jurisdiction of the State and should be
used for the greatest benefit and welfare of the people.”
The Production Sharing Contract (PSC) originated in Indonesia
in the 1960s and has been the most common type of oil and gas
development contract in the country. The PSC agreement – based
on the general concept that the contractor bears all risks and costs
of exploration until commencement of commercial production, and is
then entitled to cost recovery and a split of production revenues – has
been exported to oil and gas producing countries around the world.
In late 2001 a “New Oil and Gas Law No. 22/2001” (Law No. 22)
was promulgated which, although it maintained the PSC model as
the basis of oil and gas development, mandated the deregulation
of the upstream and downstream sectors, including Pertamina’s
monopoly over oil distribution and marketing of fuel products. Law
No. 22 authorized the establishment of an implementing agency
called BP Migas for upstream activities and a regulatory agency
called BPH Migas for downstream activities to assume Pertamina’s
regulatory roles. BP Migas took over Pertamina’s upstream regula-
tory functions and management of oil and gas contractors. BPH
Migas was charged with assuring sufficient natural gas and domestic
fuel supplies and the safe operation of refining, storage, transporta-
tion, and distribution of petroleum products.
The impact of this significant restructuring of the institutional
framework on the sector’s development has been mixed, notes
Deertz: “. . .with the issuance of Law No. 22 expectations were
high in the industry for renewed growth, however, this enthusiasm
was soon tempered by the fact that it took almost three years for
the related implementing regulations to be issued. During the
intervening period until the implementing regulations were issued
investment levels in the upstream
sector dropped significantly, how-
ever, over the past several years
investment levels have started to
rebound.”
Making sure this rebound trans-
lates into a sustained recuperation
of the oil and gas sector is one of
the main tasks of Luluk Sumiarso,
head of the Directorate General of
Oil & Gas (Migas). Since Minister
Purnomo appointed him to this key
position in 2006, Luluk has focused
on putting things in order and veri-
fying that the recent developments
in the oil and gas sector comply
with the country’s laws. In this regard, a comprehensive investor
guide has recently been edited and a new forum bringing together
all of the oil and gas sector’s stakeholders is being created.
“When I arrived to Migas, I found that each group within the oil
and gas sector had been going in its own direction, like meteors in
the sky or ‘broken pearls’ from the famous Indonesian drama series.
It resembles an orchestra made up of good musicians, but each
one playing at their own rhythm. They needed a director general to
facilitate and help co-ordinate the music,” states Luluk. By open-
ing the doors of Migas to the stakeholders in order to listen to
their concerns and suggestions and by encouraging the creation of
the Indonesian Oil & Gas Society, he is looking to “put the broken
pearls back together.”
A vital partner in this enterprise
is the Indonesian Petroleum Asso-
ciation (IPA) which is preparing its
annual convention for May 2008,
under the theme “Meeting Energy
Challenges through Co-operation.”
Roberto Lorato, President of IPA
and also Managing Director of Eni
Indonesia LTD, the local branch of
Italy’s energy giant, points out that
this flagship event is not simply
an exhibition of the association’s
members, but rather “a public
William Deertz, leader of internation-al auditor PriceWaterhouseCoopers (PwC) Indonesia’s Energy, Utilities and Mining (EU&M) practice
Luluk Sumiarso, Director General MIGAS
Roberto Lorato, President of IPA
ConEne_OGFJ_0804 1 3/10/08 4:43:08 PM
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74 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
forum and debate on the main issues that affect the industry in
Indonesia, from the business environment to corporate social
responsibility.” Besides having all the main industry players present,
the convention also counts on the participation of the highest level
of government officials.
Indonesia’s investment climate: the calm after the storm.Oil and gas sectors are highly sensitive to internal political and
economic changes and this has particularly been the case of
Indonesia. Over the last 10 years, the country has undergone a
transformation from an authoritarian regime into a presidential
democracy, has battled related secessionist pressures, endured
the full effects of the Asian financial crisis, been at the center of
bird flu and severe acute respiratory syndrome (SARS) outbreaks,
suffered several radical Islamist terrorist attacks, and faced natural
disasters such as the devastating December 2004 tsunami. All of
these events created an image of instability and insecurity that
put off investors. As a result, the Indonesian economy has lagged
behind for several years, particularly when compared with some
of its high performing neighbors. Fortunately for Indonesia, the
hard times seem to be over.
Recent economic indicators are showing that this huge economy
is confidently bouncing back under the current reform government of
President Susilo Bambang Yudhoyono, which has focused on improv-
ing the fundamentals and creating better conditions for business.
Recent economic indicators estimate growth in 2007 and 2008 at well
above 6%, and both inflation and interest rates seem under control.
Foreign direct investment is increasing, and consumer confidence is on
the rise. Major rating agencies such as Moody’s and Standard & Poor’s
have been raising the country’s credit ratings over the last several
years.
James Castle, founder and direc-
tor of local advisory firm Castle Asia,
is a seasoned businessman and ana-
lyst who has experienced Indone-
sia’s booms and busts first-hand for
more than 30 years. In his view, “In
2008, Indonesia has finally moved
beyond the 1998 financial crisis,
although it remains a watershed
and traumatic event in the country’s
history. The economy is now looking
forward, with only a few residual
problems remaining.”
Regarding the gray clouds
over the global economy and its
effects on Indonesia, Castle is reassuring: “Despite a potential global
economic slowdown, forecasts still call for domestic growth of at least
6%, a good year. Indonesia is in a good situation and is helped by the
strong global commodities cycle, as an exporter in many different com-
modities from agricultural to mineral, not just oil and gas,” he says.
Testament to Indonesia’s commitment to improve the business
environment is the active role assumed by BKPM, the government’s
investment service agency responsible for foreign investment pro-
motion, which has six international offices around the world. It has
recently overseen the writing of a
new Investment Law passed in April
2007 that eliminates many of the
barriers that previously hindered
foreign investment in the country.
Muhammad Lutfi, head of BKPM,
actively supported the new law,
which allows for a reduction in
bureaucratic processes, increases
anti-corruption measures, guaran-
tees equal treatment for overseas
and local investors, and decentral-
izes investment through regional
one-door integrated services.
Responding to such investor concerns as enduring corruption and
the added complexity arising from Indonesia’s decentralization, Lutfi
affirms, “we have adopted a zero tolerance policy regarding corrup-
tion and are also making efforts to create a uniform organization all
throughout Indonesia with the local investment agencies. In addition,
we strive to make the investment process smoother and more efficient
by eliminating bureaucracy, thus turning 30 years of red tape into a
red carpet for investors.”
In reference to the oil and gas industry, Mr. Lutfi highlights the
major business opportunities in Indonesia’s downstream sector, given
the current deregulation process, a population of over 230 million and
a growing economy. Moreover, he says, “whereas in the past energy
would follow the industries, today the trend is going towards the
industry following the energy to their source. In this context, Indonesia
is ideally placed to grow substantially its business in the refining and
petrochemicals sector.”
In addition, Indonesia needs a variety of land and sea transporta-
tion and storage modes to meet future fuel distribution needs. This
includes depots and new transit terminals as well as depots for aircraft
and gas refuelling stations by private companies. With regard to the
upstream sector, there are many investment opportunities such as the
development of unexplored oil and gas basins, using secondary recov-
ery technology, applying enhanced oil recovery (EOR), and developing
marginal oil fields.
Local eminence Dr. Subroto, a former Minister of Energy and Secre-
tary General of OPEC, considers that things in Indonesia are moving
in the right direction but acknowl-
edges that the country has to con-
tinue cleaning up its act at home in
order to become a preferred place
of investment again. In his view,
“once the Indonesian government
truly overcomes the perception of
political and legal uncertainty, there
will be no need for road shows to
lure investors as they will come run-
ning by themselves to take advan-
tage of the numerous opportunities
in the energy field. They are already
there on the sidelines eagerly
observing and waiting for improve-
ments on these critical issues.”
James Castle, founder of Castle Asia
Muhammad Lutfi Chairman of BKPM
Dr Subroto, co founder of BIMASENA, former Minister of ESDM and former Sec. Gen. of OPEC
COSL_OGFJ_0804 1 3/10/08 4:49:09 PM
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Pertamina: rebuilding Indonesia’s national championWhen Ari Soemarno assumed the position of President and CEO of
Pertamina in 2006, his condition was that he would have his hands
free to truly transform the company. He was taking the top job in Per-
tamina, Indonesia’s National Oil Company (NOC), just as its transition
period was finalizing, following the fundamental changes introduced
by the 2001 Oil & Gas Law. In 2003,
Pertamina officially went from
being a state oil and gas enterprise
governed by its own law to a state-
owned limited liability company
(Persero). In theory, this meant
that Pertamina is to be treated as
any other oil and gas company in
Indonesia. Pertamina’s monopoly in
the downstream market persisted
up until early 2006, whereas in the
upstream sector the company was
already immersed in the competitive
Exploration and Production (E&P)
market since 2005.
This statutory transformation was a part of an effort by the govern-
ment to establish a competitive and efficient NOC for Indonesia. For
decades, Pertamina held complete control of the country’s down-
stream activities and, in upstream, it acted on behalf of the govern-
ment in the signing of PSC’s for the exploration, development, and
exploitation of blocks in the country. It basically became regulator and
supervisor of the oil and gas industry for the Indonesian government.
The company grew in size but was riddled with corruption and inef-
ficiency, and unable of developing upstream capabilities of its own.
“Our foremost challenge today is to modify the culture, mindset,
and management style that are all an inheritance of the past,” says Ari
Soemarno. This is a monumental task for a company with more than
18,000 employees and such a long history of its own, but it is seen as
a necessary first step in order to get Pertamina moving in the right
direction.
In addition to changing the way the company sees itself, Pertamina
is making strides to improve its image among ordinary Indonesians.
To this end, the company has launched marketing campaigns and is
revamping its retail fuel stations where it is facing competition for the
first time from major foreign players such as Royal Dutch Shell and
Malaysia’s Petronas. For Ari Soemarno, the feedback is encourag-
ing, “The public is already taking notice and gradually changing their
perception of Pertamina.”
Of course, becoming a competitive oil and gas company involves
much more than polishing your image, and Pertamina’s directors have
been concentrating on transforming the business structure accord-
ing to its new role in both upstream and downstream activities. This
includes improving procedures related to transparency and financial
reporting, for example, in order to have a company “that is ready and
able to operate like a publicly traded company by 2009,” explains Ari
Soemarno. In addition, Pertamina is taking other measures in 2008
to become more competitive, such as selling non-core business units
and negotiating with the government in order to be able to reinvest a
greater proportion of profits.
Exploration and production: shopping for foreign know-howAlthough Pertamina is the second-largest producer of oil and gas in
Indonesia, after Chevron (in oil) and Total (in gas), its production levels
still lag behind those of other comparable NOCs. In order to grow
in reserves and production, it is pursuing an aggressive strategy that
combines tendering for new blocks, acquisitions, and implementing
EOR technology in its numerous but ageing fields. Well aware of both
its strong points and limitations, Pertamina points out the advantage
that international oil companies looking for a local player could find by
partnering with a local firm that has a deep knowledge of the country
and can facilitate the often arduous paperwork involved with doing
E&P business in Indonesia.
A prime example of Pertamina’s
upstream cooperation with majors
is the ExxonMobil-managed Cepu
field in East Java, estimated to have
reserves of 600 million barrels and
projected to attain a peak produc-
tion of 160,000 bpd. Other joint
ventures in the E&P field include
collaborating with companies such
as Petronas, Shell, and StatoilHydro.
The choice of new partners and
blocks reflect Pertamina’s determi-
nation to obtain offshore expertise,
as stressed by Sukusen Soemarinda,
Pertamina’s Corporate Senior VP for Upstream: “Through these alli-
ances, Pertamina is looking to acquire the necessary knowledge, tech-
nology, and capital to be successful in deepwater operations. Our goal
is to eventually be able to run those kinds of projects by ourselves.”
Pertamina has its hands full in Indonesia with land permits covering
an area of about 35 million acres and many new projects, yet the NOC
is already quite active in overseas markets where it is developing 20%
of its business. With interests mostly in exploration blocks in Malaysia,
Libya, and Qatar, Pertamina expects to see substantial growth from
its overseas assets within the decade. Partnerships with Lukoil and
Petroecuador could also have Pertamina venturing into new markets in
Russia and South America in the near future.
Ari Soemarno,President and CEO of Pertamina
Sukusen Soemarinda, Corporate Senior VP Upstream Pertamina
control room 055 Pertamina
CitSer_OGFJ_0804 1 3/10/08 4:45:20 PM
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Preparing for the cavalry in downstreamPertamina still largely dominates the domestic market in Indonesia’s
downstream business, although it is beginning to face competition at
different levels, including storage and retail. It owns and operates the
country’s nine oil refineries located throughout the Indonesian archi-
pelago, which have a total installed capacity of just over one million
bpd. Even though a large majority of the refined product is allocated
to the domestic market, Indonesia still has to import about 300,000
bpd to meet demand.
With tight refining margins and few incentives to build new refiner-
ies, Pertamina is focusing on revamping some of its facilities in order
to produce more high-value-added products. The main examples
are the Balikpapan refinery, which will be completely transformed to
refine sour crude, and the Cilacap refinery, which is being upgraded
in partnership with Japan’s Mitsui & Co. In addition, Pertamina has
established a US$200 million joint venture with the Korean company
SK which will improve and increase the company’s lubricant output,
further consolidating its position in the Asian market.
Though not interested in developing greenfield refineries at the
present time, Pertamina sees itself as an ideal partner for private
investors who have been showing interest in the sector. According to
Pertamina’s Corporate Senior VP for Refining, Suroso Atmomartoyo,
new players are “likely to turn to Pertamina for cooperation since
we are the only company with deep knowledge and experience in
Indonesia’s refining sector. In fact, Pertamina is open to establishing
synergies with other players interested in new refining projects, and
would be able to provide support
in terms of operations, administra-
tive tasks, and distribution in the
domestic market.”
Regarding Pertamina’s de facto
monopoly in the distribution of
subsidized fuel, with about 3,000
petrol/gasoline stations, Suroso
affirms, “in the near future, once the
subsidy has been phased out, BPH
Migas will assume its full responsibil-
ity by tendering the market among
all the interested players. For the
moment, foreign companies are not
able to comply with the strict requirements for subsidised fuel sale,
but this is likely to change soon. In 2008 Pertamina remains the sole
distributor of subsidized fuel, but we are preparing for the inevitable
arrival of competition in this enormous market.”
Despite its strategy to divest non-core business units, Pertamina
has decided to keep its geothermal activities and is also involved
in the development of coal bed methane (CBM). The government
sees CBM as potentially one of the country’s main alternative energy
sources of the future. To attract investors, the government is offering a
segment that is different from oil and gas contracts, depending on the
areas and particular conditions. Pertamina is working on a CBM pilot
project in South Sumatra with Shell and the support of the Indonesian
Research and Development Center for Oil & Gas Technology (LEMI-
GAS). Moreover, Australia’s Santos, a major CBM player in its domestic
market, is engaged in high-level discussions with the Indonesian
government on opportunities for partnership on that front.
A decade of efforts rewardedSantos entered Indonesia in 1997, but it was not until nearly 10 years
later that the company saw its exploratory efforts turn into produc-
tion and revenues. In late 2006, Santos’ first production in Indonesia
began flowing at the Maleo gas field, an event all the more important
because it represented the company’s first offshore field operated
overseas. In September 2007, Santos hit another milestone in Indo-
nesia when its second producing field, Oyong, was inaugurated by
Indonesian President Yudhoyono.
Eko Lumadyo, President and General Manager of Santos Indo-
nesia, was visibly excited about these new times. “Our Jakarta office
has now been turned into a full exploration and production opera-
tion. As a result, the organization here is forging a strong identity and
the people are motivated to continue working hard for even further
achievements,” he said.
Santos’ core assets are its oil and gas production in Australia, where
it is the country’s largest domestic gas producer and supplier. How-
ever, expansion into the Southeast Asia region has been established
as one of the five key drivers of growth for the company. Indonesia
plays a central role in Santos’ aspirations to become one of the lead-
ing energy companies in the region. Santos has been moving fast and
is already considered an important player in Indonesia’s petroleum
sector, thanks not only to its growing production but also a continued
interest in exploration and synergy with other companies.
Kilang Cilacap plant
Suroso Atmomartoyo, Corporate Senior VP Refining Pertamina
Santos Maleo Field platform
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StaHydRev_OGFJ_0804 1 3/24/08 11:27:24 AM
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80 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
For Lumadyo, “Santos’ size gives
us a competitive advantage, in
terms of being more dynamic and
able to make quick decisions. This
gives us an edge in evaluating and
taking opportunities in contrast with
bigger companies that have to go
through much longer and complex
processes. At the same time we
don’t have the same capacity as the
super majors to take on some of the
big risk projects. However Santos
is ready and able to embark on
frontier-area exploration in Indone-
sia if we consider it a good opportunity.”
Well aware of the vast potential lying in the deep seas of Indonesia,
Santos has established partnerships with companies such as Anadarko
Petroleum and Petronas for deepwater exploration and is already
operator of the block in the offshore Kutei basin.
LNG is also a significant area of focus for Santos, which is currently
exporting LNG from Darwin in northern Australia and progressing on a
number of LNG projects abroad. Though there are no concrete plans
for LNG development in Indonesia for the time being, the Kutei basin
is strategically located near Indonesia’s Bontang LNG facilities and
could eventually supply gas to it in the future.
Santos has already become a key partner of the Indonesian govern-
ment, which strongly favors increasing the role of gas in the country’s
overall energy mix. Santos is focusing its production and sales in the
densely populated and industrial area of East Java, where it is supply-
ing gas from the Maleo field to state-owned natural gas transporter
and distributor PGN and will sell the gas from the second phase of
Oyong directly to a local power company.
“Our production has come very timely for the government,
because [they are] facing gas shortages and increasing costs due to
high oil price,” says Lumadyo. “Through this gas supply, Santos is
contributing to cleaner and less expensive energy in Indonesia.”
StatoilHydro, which opened an office in Jakarta in 2007, sees
significant ecologically-minded business opportunities in Indonesia.
The company is looking to combine the need for reduced carbon
emissions with the E&P activities through carbon capture and storage
(CCS), including CO2 injection for EOR.
“Indonesia has large amounts of gas flaring that could be turned
into a means of meeting growing
demand for gas in the domestic
market,” says Tor Fjaeran, Presi-
dent Director of StatoilHydro in
Indonesia. “In addition, LNG and
ammonium plants in the country
are producing carbon emissions
that can be captured, stored, and
potentially used for EOR. The
question marks are still numerous
surrounding this technology, but our
company believes that towards the
future linking climate change to E&P
can be a business opportunity.”
Eyeing deep downWhile the viability and scope of these applications will not be clear
for years to come, what is more certain is that StatoilHydro’s arrival
in Indonesia illustrates how all eyes are on the country’s unexplored
deepwater areas. This strategic entry into the competitive Indonesian
upstream market came just as the Norwegian oil and gas compa-
nies Statoil and Hydro merged, forming the world’s largest offshore
operator. Fjaeran explains that, although the country has been on the
radar screen for a long time, there was a feeling that the most likely
prospects had already been awarded to other companies.
“We considered that the company would have only managed to
pick up small pieces, which were onshore or in shallow delta areas,”
says Fjaeran. “This all changed when the government announced the
Santos Oyong Field
Eko Lumadyo, President and General Manager of Santos Indonesia
Tor Fjaeran, President Director of StatoilHydro in Indonesia
Santos_OGFJ_0804 1 3/12/08 1:25:54 PM
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82 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
opening up of new deep offshore blocks for E&P. This meant that
our company could have access to immature basins with potential for
large discoveries in deepwater, where our expertise lies.”
Despite the differences between Norway and Indonesia, Fjaeran
believes the challenges faced by their respective oil and gas compa-
nies are not that different. On a more personal note, he adds that “I
like to work on the areas where the industry and business meet soci-
ety, and there is definitely a lot of that here in Indonesia. I enjoy being
here because it is a new place with a completely different setting, yet
at the same time it feels familiar because you meet the same compa-
nies and people with similar backgrounds as in any other country’s oil
and gas industry.”
In his view, Indonesia’s more than 100 years’ experience in oil and
gas offers many lessons to be learned for a relatively young industry
such as Norway’s oil and gas industry, which, although technologically
very advanced, has fewer than 40 years in the business.
For the moment, StatoilHydro is working on the Kuma and Karama
PSCs, two exploration blocks in relatively deep water that were
awarded in 2007. Winning these exploration licenses has been critical
for StatoilHydro because they allowed the company to finally establish
itself as a player in Indonesia’s oil and gas sector. Seismic acquisition is
set to take place in early 2008, and drilling should begin in 2009.
In Kuma, StatoilHydro is partnering with operator ConocoPhillips
with a participating interest of 40%, while in the Karama block Statoil-
Hydro is working with local NOC Pertamina with a 51% interest.
The relationship with Pertamina goes back to the signing of a
Memorandum of Understanding (MoU) between the two companies
in September 2006, allowing for potential alliances on exploration
and production in Indonesia. For Fjaeran, it is a natural fit because
“Pertamina has an extensive knowledge of Indonesia’s subsurface,
including offshore areas, and also knows the business climate, has
experience operating in the country and has close relations with the
authorities. All of these aspects are of great benefit to a company
like StatoilHydro, which is a new player in Indonesia. In addition, for a
partially state-owned company like us it just makes sense to cooper-
ate with other NOCs because we can better understand each others’
issues,” notes Fjaeran.
For Pertamina, the coalition brings benefits in terms of acquiring
technology and expertise in offshore operations.
StatoilHydro’s interest in Indonesia does not stop at deepwater
exploration and production. Another area of great interest is moving
further down the gas value chain, given the company’s long and wide
experience being operator, producing, transporting, and selling gas
products. Though nothing concrete has been decided in this regard,
Fjaeran has high hopes that there will be opportunities to get into the
gas business in the country. Similarly, StatoilHydro is intent on further
developing its LNG capabilities on a global scale and Indonesia’s
expertise in this field makes it a prospective place for partnership.
Indeed, StatoilHydro is already benefiting from Indonesian LNG know-
how through a group of engineers from PT Barak, which is helping
start up LNG facilities in northern Norway.
Elephant hunters on the looseThough StatoilHydro took its time to make the leap into Indonesia,
the super majors have played a defining role in the country’s oil and
gas sector since Dutch colonial times. Today, Chevron single-handedly
contributes to almost 50% of the country’s oil production. ExxonMobil
is working to bring the huge Cepu block onstream and is negotiating
the terms for developing the world’s largest gas field in the Natuna
Sea, while British Petroleum (BP) is leading the huge Tangguh LNG
project in Papua.
Despite these examples, most analysts are quick to point out that
overall investment from the oil giants in Indonesia has been declining
for many years now. The possible explanations are multiple, but to
a large extent this situation is a natural result of the oil and gas cycle
in which the majors start looking elsewhere once a country’s “easy”
discoveries have been made.
According to Richard L. McAdoo,
President and CEO of US-based
Continental Energy Corp. and a
long-time resident in Indonesia,
“in the latter stages of a country’s
productivity cycle, the smaller
companies eventually take over
since the majors have moved on to
greener pastures. Considering that
this is the point where Indonesia
finds itself today, and that there are
still vast unexplored areas, I believe
that the opportunities are huge for a
company like Continental.” Indeed,
Indonesia’s prospective geology and open upstream sector make it an
attractive setting for small- to medium-sized companies like Continen-
tal, which refers to itself as an “elephant hunter.” Record high oil prices
and booming energy demand from Asia certainly do not hurt either.
Continental is placing its bets on the Bengara-II block off the coast
of oil and gas rich East Kalimantan. “The Bengara-II block contains the
last great unexplored delta, the Bulungan Delta, of serious size in East
Kalimantan. The block is only 20 to 30 kilometers away from Tarakan
Island, which has been producing oil since 1906. The Bulungan Delta
is about a third the size of the Mahakam Delta in the adjacent Kutei
basin, which has provided company-maker discoveries for several
oil companies,” says McAdoo. In 2007, the company carried out an
aggressive drilling campaign and submitted a development plan to
the Indonesian authorities.
Emboldened by the success of its first major institutional placement
with Australia-based Macquarie Bank, Continental is expanding its geo-
graphical horizon by looking into the possibility of acquiring blocks out-
side Indonesia, particularly in the Middle East. Nevertheless, the focus
remains on Indonesia, a country which McAdoo is passionate about,
and he goes to great lengths to get others to share his excitement.
“There is a misconception in the USA, to a lesser degree in Europe,
and surprisingly to me, in the Middle East, that Indonesia is not a safe
place to invest,” says McAdoo. “Having been here for a very long
time, many other foreigners and I know that this is not the case. There
are huge positives which I try to accentuate, like for example the fact
that the Indonesian government has never defaulted on a PSC and
there has never been an instance of nationalization like in Venezuela or
Mexico. Taking all this into account, coupled with a well-trained oil and
gas work force, good oil field infrastructure, large unexplored areas
and attractive geology, these are compelling arguments in Indonesia’s
favor.”
Richard L. McAdoo, President and CEO of Continental Energy Corporation.
BKPMRev2_OGFJ_0804 1 3/26/08 4:35:36 PM
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84 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
“Everyone is now looking to eastern Indonesia as the future of
exploration, but these frontier areas imply a great deal of risk and
high costs which can only be assumed by the big oil companies,” says
Santosa.
Besides oil and gas, Star Energy is active in geothermal develop-
ment, a sector in which the company made its incursion in 2004 when
it acquired the Wayang Windu power generation project. Estimates
suggest that Indonesia may have up to 40% of the world’s geothermal
reserves, or the potential to produce nearly 28,000 MW, yet the seven
plants currently operating only produce a total of 850 MW.
Pertamina is another important player in this field, with rights over
15 geothermal concessions yielding a potential of 8,480 MW (equiva-
lent to 4,390 MMBOE), though current installed capacity is of only 162
MW. Star Energy’s Wayang Windu has a capacity of 110 MW, but is
embarking on expansion works in order to get capacity up to 400 MW
by 2011.
For Santosa, whether it is regarding E&P of oil, gas, or geothermal,
the key for a small company’s success in the industry is the human ele-
ment. Many of Star Energy’s employees come from big oil companies
where the corporate structure can make for a long process in terms of
professional growth.
“With us, they felt that they have the chance to realize their full
potential, because we give them greater opportunities and responsibili-
ties,” says Santosa. “Thanks to this we have a very motivated team that
knows that whenever the company does well they are also going to see
the benefits.” Human resources are of crucial importance in Indonesia at
the moment, taking into account the constant threat of a “brain drain”
of local oil and gas professionals towards better-paying countries.
Central government meets regional players to explore new O&G paths; an innovative modelFor this reason, developing local capacities in the oil and gas industry
has been a long-time concern for the Indonesian government. Domes-
tic service providers are given preferential treatment under the BP
Migas tendering system in order to help them compete with foreign
firms and public institutions such as LEMIGAS have been involved
with enhancing Indonesia’s R&D level in oil and gas for decades. A
new form of government participation at the local level is now taking
place directly in upstream development, following the increasingly
important role given to regions with regard to the management of
their resources.
In 2002, Caltex’s right to develop the Coastal Plains Pekanbaru
(CPP) block located in Riau province expired and after much contro-
versy was not renewed by the Indonesian government. Instead, local
state-owned company Bumi Siak Pusako and Pertamina formed a
new joint venture, BOB CPP, charged with maintaining production
and development of the ageing block. This partnership represented
an unprecedented model of central and regional government enti-
ties coming together to develop oil exploration and production in
Indonesia.
According to BOB CPP’s General Manager, Slamet Wibisono, “in
this moment BOB CPP is seen as many local governments as an exam-
ple of what they can achieve in becoming operators of their own O&G
resources. As PSC agreements approach their expiry dates, regional
players are looking into ways of taking over certain shares of interests
Local players get a foot on the E&P ladderForeign players are not the only ones getting in action on Indonesia’s
E&P. In fact, over the last decade, the country has witnessed the emer-
gence of important local oil and gas companies such as Medco, Energi
Mega Persada, and Star Energy. The combination of low oil prices
and the relative decline of the majors’ activities in Indonesia opened
windows of opportunity in marginal fields for smaller companies, with
leaner cost structures and an extensive knowledge of the country’s
petroleum sector.
Supramu Santosa, founder and
former CEO of Star Energy, states
that timing has also been a key
factor for new local players enter-
ing the E&P business. Only three
months after creating the company
in 2002, ConocoPhillips decided to
sell its interest in the Kakap Natuna
PSC to Star Energy since the scale
of production was no longer inter-
esting to them and it would start
declining fast. Fortunately for Star
Energy, oil prices quickly began ris-
ing and stable production at Kakap
Natuna was maintained.
“We were lucky to have started out at a very low moment of oil
prices, just before the boom began,” admits Santosa. “Today the situ-
ation is very different because the possibilities of acquiring producing
fields at a reasonable price are very low. New companies are having a
harder time because they probably have to start out with exploration
which is expensive and risky.”
This was not the case for Star Energy, whose first acquisition not
only established it as a producer, but also gave the company the finan-
cial strength to expand its asset base. Nonetheless, Kakap Natuna’s
production has started to decline, so the company is aiming at new
discoveries in the three exploration blocks acquired over the last
several years. Star Energy’s strategy is to concentrate on proven basins
in the western part of Indonesia which, although extensively explored
already, still hold potential for small players.
Supramu Santosa, founder and former CEO of Star Energy
LKF-H-0126 - Star Energy
StaEne_OGFJ_0804 1 3/11/08 10:46:10 AM
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86 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
owned by foreign companies. Of
course, before the local government
can take upon the operation of a
block, it has to show it is in capacity
to handle the responsibility.”
Indeed, this proves to be a chal-
lenging task when, as in the case of
the CPP block, the fields are mature
and new primary oil discoveries are
highly unlikely. Although the joint
venture was able to maintain Cal-
tex’s production levels initially after
taking over operations, production
has dropped from approximately
36,000 bpd at that time to 25,000 bpd in 2007.
However, Wibisono believes that over the coming years produc-
tion level could be doubled if BOB CPP manages to successfully apply
EOR techniques to the operations.
“We realize that the techniques our fields require are very
advanced, which is why BOB CPP is working together with partners
like LEMIGAS and also inviting foreign companies who could provide
us with proven technology for enhanced oil recovery.” he says. As
there is also exploration taking place in the block, BOB CPP’s produc-
tion could reach even higher levels if new discoveries are made.
Furthermore, the company is preparing itself to be internationally
competitive, foreseeing a possible expansion overseas in the future.
The dragon has arrived... and intends to stay A sign of the times, Chinese companies have been increasingly making
their mark on the Indonesian oil and gas sector over the last several
years. Upstream giants Petrochina and CNOOC have established
their position in the E&P industry and are aggressively expanding
their assets and operations in the country. This trend is only likely to
intensify towards the future as China’s economy keeps growing at near
double-digit rates and domestically-produced resources are insuffi-
cient to keep up with the soaring energy demand.
In this context, Indonesia is seen as a strategic partner for the
Chinese government with whom relations are going through a positive
moment, particularly on energy issues. Moreover, China’s heightened
importance in the global economy is prompting Chinese companies to
seek growth overseas in order to become internationally competitive,
world class firms.
A clear example of this trend is Beijing-based CITIC Group, which
is investing for the first time in the oil and gas sector abroad through
its energy sector holding company CITIC Resources (based in Hong-
Kong). Already involved in the raw materials business in areas such as
coal and aluminum, CITIC Resources has recently decided that it was
a good moment to expand the company’s portfolio of activities into
oil and gas overseas, and Indonesia represents the company’s first
international venture.
As Tang Zhongfu, President of the fully owned subsidiary CITIC
Seram Energy Limited (CSEL) explains, there are many good reasons
why Indonesia was chosen as the first overseas oil and gas destination.
Slamet Wibisono, BOB CPP’s General Manager
BOBCPP_OGFJ_0804 1 3/10/08 4:57:39 PM
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April 2008 Oil & Gas Financial Journal • www.ogfj.com www.focusreports.net 87
“First of all, there is the PSC
mechanism which is an Indonesian
creation and thus very mature in the
country. It is a system that makes
us feel comfortable to invest in Indo-
nesia because it is very clear and
transparent,” says Zhongfu. “The
second reason why we have chosen
Indonesia is because it serves as a
good platform for CITIC Resources
to expand its business portfolio,
thanks to the large amount of oil
companies working in this country
as PSCs. Being active here allows
us to share experiences with them and be well informed about new
business opportunities. Thirdly, Indonesia is one of the main LNG pro-
ducers in the world, which makes the potential for gas development,
especially offshore, very interesting,” he says.
CSEL officially entered the Indonesian upstream petroleum market
when it completed acquisition of a 51% majority interest in the Seram
Island Non-Bula PSC. A notable aspect of this move is that CSEL
also became the operator of the block, which marks a change in the
group’s strategy for oil investments from passive holdings to an active
involvement. Nonetheless, this is by no means a new task for CSEL’s
management, which has gathered much experience over the years
operating in companies such as Petrochina.
In 2007, the block’s production was at about 4,200 bpd and the
announced objective is to maintain those levels and increase overall
production in Indonesia through the development of existing interests
in other blocks and possibly through acquisitions. In this regard, CSEL
entered into a non-binding MoU with Kuwait Foreign Petroleum
Exploration Company (KUFPEC) over closer cooperation in exploring
oil and gas business ventures in Indonesia and other countries.
“Citic Resources sees this first project as a platform, so depending
on how good the results are, we will probably go after other business
opportunities in the near future,” concludes Zhongfu.
Chinese supporting industry comes along for the rideChinese service providers are also taking advantage of their coun-
try’s strong economy and high levels of investment in its manufac-
turing base to target growth in overseas markets. Chinese Oilfield
Services Limited (COSL) is one of the main players in this group,
with over 30 years’ experience in its domestic market. COSL is also
a familiar face in international markets where it has been active
for over 10 years, particularly in drilling rigs and different offshore
business lines. COSL’s initial strategy for international expansion
was based on working exclusively with Chinese E&P players such as
CNOOC and Petrochina, which are already established abroad.
This was also the modus operandi for COSL when it first came to
Indonesia five years ago, when it began assessing the potential of
the country’s large population and rich natural resources. Consider-
ing it has passed its first phase of its business development in Indo-
nesia, COSL has taken a significant step forward by working with
international majors such as ConocoPhillips, Chevron, and others.
Benefiting from decades of establishing relations with large
international oil and gas companies in China’s domestic market,
COSL is aiming at becoming a preferred upstream service provider
for companies around the world.
In Indonesia, “COSL has devel-
oped a strong relationship with
Pertamina and prefers to establish
partnerships with companies of
different sizes and profiles. At this
stage in our Indonesian strategy,
all companies have the same
importance,” says President Direc-
tor of PT COSL Indo Zi Shilong. So
far, COSL’s most important busi-
ness lines in Indonesia are drilling
and well services. But the company
intends on bringing its transporta-
tion and seismic services to the
country by 2009, thereby offer-
ing the full range of its capabilities to the Indonesian oil and gas
industry. In effect, COSL’s goal is to become involved in Integrated
Project Management in Indonesia, servicing the entire project life
cycle.
“We perform this activity in China, extending beyond drilling to
transportation, seismic and other services. COSL’s advantage is its
ability to perform services over the whole life of the oilfield, from
beginning to end,” states Shilong.
Thus far, COSL is satisfied with the business environment in
Indonesia and upbeat about future opportunities to continue grow-
ing. Stressing the cultural similarities and good relations between
China and Indonesia, Mr. Shilong acknowledges the great effort
that the Indonesian government has put on increasing its oil pro-
duction and is confident that this will translate into an even greater
demand for oil services.
Although the oil boom has generated a global shortage in
oil-related equipment and Indonesian projects must therefore
compete with those in other O&G producing regions around the
world, COSL has committed to expand its business and increase
investment in Indonesia over the coming years.
“COSL has offered the local oil and gas community reason-
able cost and comprehensive service. We strongly believe that the
existence of COSL in Indonesia will be mutually beneficial to our
countries,” says Mr. Shilong.
Zi Shilong, President Director of PT COSL Indo
Field Facility Citic Seram
Tang Zhongfu, President Director CITIC Seram Energy Limited (CSEL)
88 www.focusreports.net April 2008 Oil & Gas Financial Journal • www.ogfj.com
I n late 2005 Pricewater-
houseCoopers Indonesia (PwC)
in cooperation with the Indo-
nesia Petroleum Association (IPA) under-
took an industry survey to gauge industry
participants’ views on the competitiveness
of the Indonesian upstream oil and gas
sector (an updated survey is in process and
is expected to be published May 2008). The
survey found that industry participants were
generally very favorable on the geological
prospectivity of the country, in particular the
Eastern basins, which remain largely unex-
plored. In addition, survey participants were
very positive on the PSC fiscal regime since
it was well understood by both regulators
and industry players.
Survey participants were also quick to
point out many of the challenges confront-
ing the Government of Indonesia (GOI) as
it tries to deregulate the oil and gas sector
and make it a world-class industry to propel
Indonesia’s economic growth into the 21st
century. In particular, one area of concern
related to inter-ministerial coordination. In
the newly deregulated environment created
by the New Oil and Gas Law No. 22/2001,
there are now more GOI stakeholders that
industry players need to deal with. Often
at times these stakeholders have different
interpretations of the prevailing regulations
and their associated scope of responsibility.
Survey participants rated harmonizing
conflicting laws and regulations (including
timely issuance of implementing regulations
after new laws are introduced) and improv-
ing teamwork and coordination among
the various GOI stakeholders as having
the biggest potential impact to improv-
ing the investment climate for the energy
sector. Since the issuance of this survey
there have been many public forums where
the GOI stakeholders and industry players
have shared views on the issues and ways
forward.
In addition, the Coordinating Minister of
the Economy has formed a committee to
address the lack of coordination and team-
work amongst the different ministries and
departments of the government, although
the progress to date has been slower than
many stakeholders would like. Despite
this fact, the GOI stakeholders have been
receptive in listening to industry players and
taking measurable steps to improve the
investment climate in the energy sector. As
such, there is reason for optimism.
Is the glass half empty or half full?While not wanting to downplay the many
challenges impeding Indonesia’s economic
growth and in particular the competitive-
ness of its oil and gas sector, one needs to
recognize the many difficulties confronting
the GOI stakeholders.
Indonesia is a geographically large coun-
try spread out over 13,000-plus islands with
many diverse cultures and ethnic groups.
Because of this diversity there was a real
danger early in the post-Suharto era for
the country to “Balkanize.” Fortunately this
has not happened and in large part can be
attributed to the Regional Autonomy Law
passed by the government, which shares
more powers and economic rewards with
the provincial and local governments.
However, this has created new chal-
lenges for companies operating in the oil
and gas sector such as local government
involvement in land acquisition, approvals of
plans of development, along with the impo-
sition of new local taxes which are generally
prohibited by the contracts issued by the
central government. The central govern-
ment has been reactive in addressing these
sorts of issues as they arise and facilitating
solutions.
When assessing the competitiveness
of the Indonesian upstream oil and gas
sector an investor needs to consider many
variables. We have highlighted some of the
positive and negative trends impacting the
sector in the below table:
Positive TrendsIncreased acreage being tendered, •
much with improved fiscal incentives
Increased political and social stability•
Direct tendering of acreage now pos-•
sible
Posting of bonds for initial contract •
commitment now required to encour-
age active exploration
Clear GOI vision and target for oil pro-•
duction of 1.3 million BOPD by 2009
Recent renewal of duty and import tax •
exemptions for exploration activities
Development of a national energy •
policy with concrete energy use targets
Significant reduction in fuel subsidies, •
which has allowed monetization of
some stranded gas reserves
Negative TrendsIncreased cost recovery challenges and •
continuing uncertainty over upstream
taxation
Continued lengthy bureaucracy for •
approving Plans of Development,
Work Programs, and AFE’s
Operating costs per barrel on upward •
trend due to maturing fields
Continued lack of coordination among •
the various GOI stakeholders in resolv-
ing industry issues
Regional governments and local com-•
munities have impeded expeditious
development of certain projects
Considering Indonesia’s complexity
and the recent political and economic
transformations, the country has fared fairly
well and is heading in the right direction.
Industry players tend to agree with this
view but mention the speed of progress as
their single biggest frustration in Indonesia.
Potential investors need to recognize that
operating in the Indonesian oil and gas sec-
tor presents many challenges but the upside
financial opportunities can be significant.
Reason for OptimismMany economists project Indonesia’s GDP
growth to average between 6% and 7%
over the next several years. However, with
the right leadership and policies, there is no
reason not to expect a 9% to 10% growth
rate.
PricewaterhouseCoopers Indonesia is
cautiously optimistic as to growth opportu-
nities and is projecting a 15% CAGR over
the next five years for its own business. For
investors that are willing to see through the
country’s challenges, the opportunities that
await could be a hidden gem.
William DeertzPricewaterhouseCoopers
IndonesiaInvestor Insight Into Indonesia’s Oil & Gas Sector
•••••••
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PerPro_OGFJ_0804 1 3/10/08 5:02:41 PM
email: [email protected]