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Indonesian oil and gas

Hydrocarbon Engineering,

The outlook for Indonesia’s oil and gas sector is becoming increasingly uncertain according to a new report from Business Monitor. A long term decline in total liquids production and stagnation of gas production has been forecast by the company. Slow exploration and development is being blamed for this, and is apparently being exacerbated by an increasingly uncertain regulatory environment as resource nationalism creeps into government policy. Export opportunities are also expected to be compromised further by the domestic market’s increasing energy demand, so falling oil and gas exports is going to be a key trend in the Indonesian oil and gas sector.

Key findings

  • Oil and gas reserves will most likely be on a downward trend in the coming decade. Oil reserves are expected to fall to 3.7 billion bbls by 2017 and 3.4 billion bbls by 2022. Gas reserves are expected to remain stagnant for the moment but fall to 2.80 trillion m3 by 2017 and 2.51 trillion m3.
  • If the country relaxes its nationalist stance on resources, there is upside potential for both oil and gas reserves.
  • Excluding refinery processing gains, Business Monitor expect total liquids production to rise from 919 670 bpd in 2013 to 926 180 bpd in 2014 due to major fields that are due to come onstream. From 2017 onwards however a downward trend is expected with a low of 808 280 bpd in 2022.
  • There are plans to expand Indoniesia’s refining capacity, however there is difficulty financing Greenfield projects as well as modernising older facilities. Unfavourable policy is limiting the changes needed for the country’s downstream industry.
  • Refining capacity is expected to stay stagnant until 2015.
  • Business Monitor expect natural gas production to remain stagnant at 76.7 billion m3 to 2022.
  • More confidence could be inspired by Indonesia’s oil and gas industry if there is a more consistent policy enforced. 
Adapted from a press release by Claira Lloyd.

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