Indonesia Now Net Oil Importer - Approx. 100,000 Barrels/Day - Energy Tribune

Indonesia’s oil production continues its inexorable decline, and, despite government promises, little apparent progress is being made. Worse yet, the long-time oil exporter has become an oil importer, currently importing about 100,000 barrels per day.

OPEC-member Indonesia rea-ched peak oil output of about 1.6 million bpd back in 1991. In 2006, production was just over 1 million bpd – a drop of about 5.3 percent, compared to 2005.

Chris Newton, a board member of the Indonesian Petroleum Association, says much can be done to kick-start production and mitigate production decline, if only the country can get its investment protocols in order. The Indonesian government is planning to rewrite its production sharing contracts to correct long-standing tax and cost-recovery issues. But unless or until those issues are resolved, Indonesia cannot undertake a new round of exploration block offerings. Newton says that 2007 is the first year Indonesia hasn’t offered any new blocks for exploration, although some were supposed to be. The lack of new exploration activity will likely mean that Indonesia’s oil imports will continue growing.

Given the offering delay and other factors, such as project development delays and the failure to lock in reserves additions, Newton says Indonesia is now “way behind” in its goal, proposed in 2005, of reaching a production of 1.3 million bpd.

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