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Oil majors are leaving Indonesia: Should we be concerned?
We should be worried about the steady fall in the oil production to as low as 660,000 barrels per day (bpd)) last year, as against the total national need of 1.4 million bpd.
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Chevron workers inspect an oil and gas facility at the Rokan Block in Riau at an unspecified date. Photos were handed out on March 2020. (SKK Migas/SKK Migas)
T
hree global companies — Shell, Chevron and ConocoPhillips — are selling billions of dollars’ worth of their shares in big oil and gas development projects in Indonesia despite the country badly needing huge exploration investment to cope with its ever-widening oil deficit.
Seen from all the strong commitments and big targets for the reduction of carbon emissions pledged by the Indonesian government at the COP26 climate summit in Glasgow, the United Kingdom, last November, that trend may be well-timed and be greatly welcomed.
“Good riddance!” obstinate green campaigners may shout, preferring the potential hydrocarbon resources in the world’s largest archipelago country to remain stranded underground or under seawaters in order to realize the green commitments.
But looking into our short and medium-term national interests, we should be worried about the steady fall in oil production to as low as 660,000 barrels per day (bpd) last year, as against the total national need of 1.4 million bpd. Indonesian oil production peaked at 1.68 million bpd in 1981.
Forget for a moment the conveniently made long-term goal of net-zero emissions by 2050 or 2060. Even the 23 percent target for renewable energy in our national energy mix by 2025 seems still a pipe dream as the current realization is a mere 11 percent.
However unpopular it is now to talk about fossil fuels and the hydrocarbon sector, energy analysts still project oil will continue to be the main fuel in the transportation sector in Indonesia even until 2040.
Look how addicted we have become to cheap (subsidized) gasoline. As government leaders and most politicians are so obsessed with the five-year political cycle in the national leadership, they do not have the courage to consistently implement a long-term strategy to phase out fossil fuel subsidies.
