New Energy market report from Business Monitor International: "Indonesia Oil & Gas Report Q1 2013"

Boston, MA -- (SBWire) -- 02/05/2013 --BMI View: Oil and gas exports form one of the key pillars of the Indonesian economy, although the outlook for the sector is becoming increasingly uncertain given dwindling oil reserves in the country's maturing fields. The government has recently put in place measures to incentivise companies to conduct deepwater exploration in a bid to increase total reserves, though a policy to limit exports threatens to decrease upstream interest. Greater domestic consumption leading to higher imports and lesser exports will be a key trend in the years to come.

The main trends and developments we highlight for Indonesia's Oil and Gas sector are:

?? Despite expectations that ExxonMobil's Cepu field, which is to reach peak production of 165,000 barrels per day (b/d) by late 2014, and associated condensate production from Total's South Mahakam project and Chevron's Gendalo-Gehem development will contribute to crude oil and gas liquids production, we have revised down our forecast for 2017 to 896,300b/d. The country will remain a net importer of oil - with 2017 consumption forecast at 1.323mn b/d as domestic electricity demand in the country expands along with economic growth. ?? Steps are being taken to cope with rapidly rising demand for fuel and electricity. The government has been considering scrapping fuel subsidies for private cars - starting on April 1 2012 in Greater Jakarta and later for other parts of Java and Bali. However, these have been met with considerable political opposition. ?? Natural gas production is expected to hit a near-term peak of around 79.9bn cubic metres (bcm) in 2012. The country's gas consumption is on the rise and is forecast to reach 55.7bcm by 2017. We expect natural gas exports to rise slightly from 36.3bcm in 2012 to 40.4bcm by 2017. ?? Production from Indonesia's East Natuna gas project is unlikely to start before 2022, and bringing the large-scale project onstream could cost up to US$40bn. The Natuna D-Alpha block is estimated to hold 1.29trn cubic metres (tcm) of recoverable gas reserves, making it the largest single gas field in Asia. ?? The government and House of Representatives have agreed that new contracts could limit gas exports to 50% or less of total production. The Energy and Mineral Resource Ministry also implied that contract renegotiations could be in place if they are deemed not to be 'beneficial' for the country. This could challenge industry interest in new gas blocks, and could adversely affect the rate of development of its unconventional resources.

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