Indonesia

Basic Facts

Government: Republic

GDP: $ 969.2 billion (2009 est.)

GDP Composition: 15.3% agriculture, 47.6% industry, 37.1% services

GDP Growth rate: 4.5% (2009 est.)

Budget Revenues: $ 93.03 billion

Budget Expenditures: $ 101.8 billion (2009 est.)

Industrial Products: petroleum and natural gas, textiles, apparel, footwear, mining

Maps:

Indonesia: map with mining locations (click to enlarge)

Indonesia: physical map (click to enlarge; file-size 3,7 MB)

Indonesia: physical map

Brief Overview

Indigenous oil, gas and coal reserves have played an important role in Indonesia economy as a source of energy, industrial raw material and foreign exchange. In 2008, oil and gas exports contributed the largest share (21.1%) of Indonesia total exports of USD 136.76 billion, followed by minerals (including coal) at 18.8%. Overall, tax and no -tax revenue from oil, gas and minerals accounted for 27.2% of the Indonesian Government s budget in 2008. Indonesia proven fossil energy reserves at the end of 2008 comprised 3.7 billion barrels of oil (2007: 4.0 billion barrels); 3.18 trillion cubic metres of natural gas (2007: 3.0 trillion cubic metres); and 4328 million tonnes (Mt) of coal (2007: 4968 Mt).

Most of Indonesia crude oil is produced onshore from two of Indonesia largest oil fields: the Minas and Duri oil fields in the province of Riau in the eastern coast of central Sumatra. The two fields are mature, and the Duri field is the site of one of the world largest enhanced oil recovery efforts. In 2007, 81.2% of Indonesia oil was produced from the province of Riau. Other principal oil-producing regions are South Sumatra, onshore and offshore East Kalimantan, the Natuna Sea (east of Java), Jambi on the east coast of central Sumatra, and the province of Papua. Indonesia large natural gas reserves are located near Arun in Aceh, around Badak in East Kalimantan, and in South Sumatra, the Natuna Sea, the Makassar Strait, the Timor Sea and Papua; smaller gas fields are offshore from West and East Java. The LNG project in Tangguh, Papua, began LNG exports in 2009; its gas supply comes from the onshore and offshore Wiriagar and Berau gas blocks, which are estimated to have reserves of at least 14 trillion cubic feet (Tcf).

About 57% of Indonesia total recoverable coal reserves is lignite, while 27% is subbituminous coal, 14% is bituminous coal, and less than 0.5% is anthracite. Most of Indonesia coal reserves are in South Sumatra and East Kalimantan; relatively small deposits of coal are in West Java and in Sulawesi. Indonesian coal has a heating value range of 5000 to 7000 kilocalories per kilogram and is distinctive for its low ash and sulphur content (sulphur content is typically less than 1%).

On 10 August 2007, Indonesia enacted the Energy Law (Law No. 30/2007). The Energy Law elucidates principles for the utilisation of energy resources and final energy use, security of supply, energy conservation and protection of the environment with regard to energy use, pricing of energy, and international cooperation. The Energy Law sets out the content of the National Energy Policy (KEN, Kebijakan Energi Nasional); the roles and responsibilities of the central government and regional governments in planning, policy and regulation; development priorities for energy research and development; and the role of enterprises.

Under the Energy Law, the National Energy Policy will address the availability of energy to meet the economy requirements, energy development priorities, the utilisation of domestic energy resources, and the economy energy supply reserves. The Energy Law mandates the creation of a National Energy Council (DEN, Dewan Energi Nasional). Indonesia oil and gas sector experienced important structural change with the enactment of a new Oil and Gas Law (Law No. 21/2001) in 2001. The new law created an upstream oil and gas implementing body (BP MIGAS, Badan Pelaksana Hilir Minyak dan Gas Bumi), and a downstream oil and gas regulatory body (BPH MIGAS, Badan Pengatur Hilir Minyak dan Gas Bumi). These entities report to parliament and are not part of government departments. BP MIGAS tasks include signing cooperation contracts, including PSCs; approving plans of field development; approving contractors work programs and budgets, and authorisations for expenditure; and monitoring the realisation of contracts. The Oil and Gas Law ruled that the state-owned oil company, Pertamina, would relinquish its governmental roles. On 16 December 2008, parliament passed a new law on mining to replace Law No. 11/1967, which had been in place for 41 years. The new law was enacted by the government on 12 January 2009 as Law No. 4/2009 regarding Mineral and Coal Mining.

The new Mining Law basically ended the concession of work areas by contracts of work (CoW) and by works agreements of coal mining enterprises (PKP2B, Perjanjian Karya Perusahaan Pertambangan Batubara). Concessions are now based on permits from the central and regional governments. Prior to the new law, the government arguably had less regulatory control over its concessions. For example, any changes to concession terms needed to be agreed by both the government and the investor. By instituting licensing, the government expects to be better placed to promote investments and to regulate mining.

In December 2009, the Indonesian Government announced its mid-term oil and gas management road map, which includes a target of USD 31.2 billion in investments for oil and gas infrastructure from 2010 to 2014. Of the total investment, 69.5% (USD 21.68 billion) is for gas facilities, including LNG and LPG receiving terminals, LPG refineries and residential gas pipeline networks. The remaining 30.5% (USD 9.53 billion) is for oil facilities, including refineries and rigs. The government expects total investment to peak in 2013 at USD 10.57 billion.[1]

Government body

Ministry of Energy and Mineral Sources of Indonesia.

National Company

Pertamina

External Company

Exxon, ConocoPhillips, Shell, Total, Petronas

Current Condition

No. Category Production

Consumption

Country Revenue
1. Oil 987,500 bbl/day (2008 est.) 1.564 million bbl/day
2. Gas 70 billion cu m (2008 est.) 33.5 billion cu m (2008 est.)
3. Coal
4. Minerals

* Note: production of crude oil (including lease condensate), natural gas plant liquid and other liquids, and refinery processing gain (loss)


[1]Asia Pacific Energy Research Centre (APREC) The Institute of Energy Economics Japan, APEC Energy Overview 2009, March 2010, p.61-77

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