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Energy Crisis Threatens Indonesia
Pertamina's oil refinery in Cilacap, West Java. TEMPO/Aris Andrianto
Tuesday, 05 May, 2015 | 17:28 WIB
Energy Crisis Threatens Indonesia

TEMPO.CO, Jakarta - Energy crisis is bound to threaten Indonesia in the next few years following the significant gap between high energy demand and domestic oil supplies.

Indonesian Petroleum Association (IPA) executive director Dipnala Tamzil said energy demand in 2010 was 3.3 millionb barrels of oil equivalent per day (BOEPD). The demanded energy comprised fuel, gas and coal. In 2025, energy demand will increase to 7.7 million BOEPD. From that amount, the proportion of fuel and gas is around 47 percent.

"If Indonesia does nothing to the increasing energy demand while supply keeps decreasing, Indonesia will become a net importer," said Dipnala on Tuesday.

Energy crisis in Indonesia has begun to show its symptoms. In 2015, Indonesia will experience shortage of oil supply and gas by 2.4-2.5 million BOEPD. "If there's no new reserve found, oil and gas in Indonesia will run out in 11 years and Indonesia will become a net importer," said Dipnala.

The estimates are based on the reserve requirement ratio of oil and gas. According to Dipnala, the ideal ratio is 100 percent, meaning 100 percent production output and 100 percent new reserve input. "However, with production of 47 percent, it has gnawed on reserve and supplies will eventually run out," said Dipnala.

Discovering new oil reserves also takes a relatively long time, which is 10 years starting from exploration to production. This energy crisis in Indonesia will be the main theme of the 39th IPA Convention and Exhibition at JCC on May 20-22.

IPA president Craig Stewart said it was pivotal for all stakeholders to work together to find a solution to future energy deficit.

According to Craig, various challenges faced by industry players included red tape, legal uncertainty, difficult access to land utilization and lack of incentives for massive projects with high costs.

"These have caused a significant decrease in exploration activities," said Craig.

 

AMIRULLAH



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