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Indonesia eyes oil self sufficiency by 2010
By Upstream staff
Indonesia’s government plans to raise the country’s oil production to between 1.2 million and 1.5 million barrels per day by 2010 from about 920,000 bpd currently in an effort to achieve self-sufficiency amid surging global oil prices.
Vice President Jusuf Kalla told officials of state oil company Pertamina to increase production levels to help lift subsidy burdens and to refrain from having to import oil, reported local media.
Indonesia has been a net importer of oil over the last five years due to low production levels and a lack of new investment in the oil sector.
"I am sure we can be self-sufficient by 2010 if we can start new plants in Cepu and Natuna to produce oil immediately. This is the only way we can satisfy domestic needs safely, while avoiding imports to get out of skyrocketing oil prices," The Jakarta Post reported Kalla saying.
Kalla said to allow the country to increase production it must forge efficiency and increase output at the production unit level, particularly at all six of Pertamina's production units in Balikpapan, East Kalimantan, Riau, South Sumatera, Balongan in West Java, Cilacap in Central Java and Papua.
With crude oil prices hitting $124.70 a barrel today, Indonesia has to allocate 126.8 trillion rupiah ($13.77 billion) on fuel subsidies, or about 13% of this year's government spending.
Ageing oil wells and lack of investment in the oil and gas sector have pushed Indonesia's oil production to dwindle. The government predicted Indonesia's average daily oil lifting at 927,000 barrels this year, down from 950,000 bpd last year.
“Previously, we could just ask for a share from our partner, and then sit back to wait for the profits. With such a high oil price, and our low production capability, we can’t do that anymore,” said Kalla.
Friday, 09 May, 2008, 07:08 GMT | last updated: Friday, 09 May, 2008, 07:08 GMT
