BMI View: An uncertain regulatory environment and low oil prices will impede exploration and hydrocarbons in Indonesia. Outlook for the downstream sector is more positive as economic growth will support refined fuels consumption growth and refinery projects have attracted interest from overseas investors.
|e/f = BMI estimate/forecast. Source: National Sources, BMI|
|Crude, NGPL & other liquids prod, 000b/d||901.0||887.8||852.3||845.4||836.9||823.1||816.7|
|Dry natural gas production, bcm||70.7||70.8||67.3||69.0||68.2||67.9||67.0|
|Dry natural gas consumption, bcm||42.3||44.0||46.2||48.0||49.9||51.9||54.0|
|Refined products production, 000b/d||868.6||781.8||785.7||777.8||770.0||773.9||851.3|
|Refined products consumption & ethanol, 000b/d||1,716.4||1,795.4||1,858.1||1,903.0||1,939.8||1,987.4||2,026.7|
Latest Updates and Key Forecasts
Indonesia's crude oil production is on a long-term decline and the country will become a net importer of crude oil from 2020. As firms continue to relinquish their exploration and production blocks, we see limited upside risks to production.
Indonesia's refining capacity is set to expand by 510,000b/d over the next decade as several of the country's aging refineries undergo upgrading and the expected start-up of the Bontang refinery in 2022. This will reduce Indonesia's refined fuels deficit, though it will remain a sizeable net importer to 2025. Foreign investors continue to be interested in the country's refining projects.
Indonesia is forecast to maintain self-sufficiency in natural gas over the next 10 years, but stagnant production and rising domestic demand will progressively require the country to reduce its gas exports to prioritise satisfying domestic needs. We highlight that greater commercialisation of the country's vast CBM reserves could help to ease the pressure, though regulatory uncertainties and environmental concerns pose headwinds.
To attract investments into unconventional, the Ministry of Energy and Mineral Resources (MEMR) introduced new production sharing contracts (PSCs) in November 2015 which allow the percentage split between the contractor and the government to be adjusted based on the amount of production.
The MEMR invited firms to submit bids to explore three non-conventional oil and gas blocks in the country under this new regulation. These blocks are Blora in East and West Java; Batu Ampar in East Kalimantan; and Central Bangkanai in Central and East Kalimantan. Interested companies should submit their bids electronically by December 15 2015.
We believe that the proposed amendment to Indonesia's oil and gas law, which points towards greater state involvement in the upstream sector, together with the low oil price environment will serve to dampen investor interest in the upcoming licensing round in 2016.
The Indonesia Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Indonesia including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's Indonesia Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Indonesian oil and gas industry.
- Benchmark BMI's independent oil and gas industry forecasts for Indonesia to test consensus views - a key input for successful budgeting and strategic business planning in the Indonesian oil and gas market.
- Target business opportunities and risks in the Indonesian oil and gas sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Indonesia.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.
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Summary of BMI’s key forecasts and industry analysis, covering oil and gas reserves, supply, demand and refining, plus analysis of landmark company developments and key changes in the regulatory environment.
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Historic data series and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast:
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A profile of the upstream and downstream sectors, including analysis of reserves, output, consumption and trade of energy products; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Comparative company analyses by USD sales, % share of total sales, number of employees, year established, ownership structure, oil production (‘000b/d), gas production (bcm), downstream capacity (‘000b/d) and % market share.
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