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Indonesia plans new oil infrastructure to augment dropping production levels

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(Credit: Reuters) The image shows an oil and gas refinery.Oil and Gas Refineries
January 2
1:54 AM 2014

BPPT deputy head Unggul Priyanto said the local consumption in Indonesia has changed the status of the region being one of the largest oil producers in the world to a net importer. Once a part of the Organization of the Petroleum Exporting Countries, Indonesia withdrew its membership in December 2008.

The Bekapai field of the local unit of the French oil major Total SA, Total E&P Indonesie, used to pump over 50,000 barrels a day in 1978. A spokesman, Kristanto Hartadi, said it now takes over 60 days just to fill a 500,000 barrel tank with crude from the field, which is 50 days longer than the amount of time to fill the same barrel tank. A Bloomberg report said the Bekapai field not flows at 7,000 barrels.

The Agency for the Assessment and Application of Technology said Aging fields, rising exploration costs and increased fuel demand will create an oil crisis in the most populous nation in Southeast Asia, forcing it to import 90 percent of the oil it needs by 2030.

Because of the need for fuel supply, plans for a new 300,000 barrel-a-day refinery to be constructed in Tuban, East Java in 2018 are under way. Expansion plans are also set for the Balongan plant in Cirebon in 2025, the report said.

BPPT head Marzan Iskandar said in a separate interview, "When the new refineries start operations, it would cut imports of oil products, but raise crude purchases because we won't produce much oil."

BPPT said in its report in December that imports will increase to to 532 million barrels, which is four times than its usual 134 million, while production is expected to slow down from 329 million in 2011 to 124 million barrels in 2030. The drying oil fields of Indonesia is putting a dent on the nation's coffers, as oil and gas sector regulator SKK Migas showed in its data that cost recovery expenses by oil producers reimbursed by the national government has increased four times to $15.98 billion in the past 11 years.

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