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Indonesia to remain a net importer of oil this year: Ministry
The government estimates that the balance of trade in oil and fuels will remain negative this year with imports outweighing exports
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he government estimates that the balance of trade in oil and fuels will remain negative this year with imports outweighing exports. The fuel trade deficit may reach 273,000 barrels of oil per day (bopd), or slightly higher than last year’s figure.
An official report from the Energy and Mineral Resources Ministry states that trade balance deficit arises from fuel imports. The country’s crude oil trade balance is actually still positive with crude oil exports estimated at 399,000 bopd, much higher than crude oil imports estimated at 254,000 bopd.
“But, when the fuel imports of 418,000 bopd are included in the calculation, the trade balance is changed with exports reaching 399,000 bopd and imports reaching 672,000 bopd ; meaning imports are higher than exports,” the report said.
The total average daily deficit stood at 272,000 bopd last year.
Indonesia has been a net importer since 2003 due to declining oil production and increasing domestic fuel demand, and problems optimizing local refining for local markets.
The country’s oil production was 1.5 million bopd between 1977 and 1991. But, since 2007, output fell below 1 million bopd due to declining production from aging fields without sufficient new exploration and production in increasingly difficult areas. Nevertheless, the government still aims for growth in oil production in the next five years.
“Short term, Indonesia’s oil production will increase [again] because of the new reserves found in the Cepu block, but then production will decrease again due to the high overall rate of decline [in our overall production] reaching 12 percent a year,” the report said.
The Cepu block is located at the border between East and Central Java. The block is said to hold proven reserves of 600 million barrels of oil and 1.7 trillion cubic feet of gas.
Efforts to find other big oil and gas blocks have yet to show results. Of 16 oil and gas blocks offered for further development between December and April this year, only five blocks won developers.
“If the situation remains like this, my objective to maintain national oil production at about one million barrels per day cannot be achieved,” Evita Legowo, director general for oil and gas at the ministry, said on Sept. 11.
In a bid to anticipate soaring demand for fuels, the government has mandated the gradual phasing-in of biofuel usage for manufacturers, commercial businesses, fuel retailers and power plant operators.
The government is also evaluating a coal liquefaction program. Currently, the government is
conducting pre-feasibility studies for coal liquefaction at three locations: Mulia (South Kalimantan); Berau (East Kalimantan and Banko (South Sumatra).
