JAKARTA, INDONESIA — Indonesia’s oil reserve currently stands at 3.77 billion barrel, meaning that that the reserves will only be enough to sustain the country’s energy needs until 2028, said Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif at the Tempo Energy Day on 21 October.
The declining oil reserve is due to the drop in the country’s domestic output thanks to the ageing oil fields.
Such a condition is similar to the country’s fossil fuel reserve besides oil. Indonesia’s coal reserve is expected to run out in 65 years.
Why does Indonesia import oil from Singapore?
The oil and gas sector was once one of the most significant contributors to the country’s revenue. A study from the Reforminer Institute as quoted in Kompas revealed that during the 1970-1990 period, Indonesia’s oil and gas sector contributed to 62.88 per cent of the state revenue.
Indonesia has been an oil-importing country since 2004 due to the country’s ageing oil fields.
Mr Bisman Bhaktiar from PUSHEP told TOC that Indonesia’s fuel needs reach 1.5 million barrel per day while the lifting only stands at around 700,000 barrel per day (The Upstream Oil and Gas Special Regulatory Taskforce (SKK Migas) data in 2016 showed that Indonesia’s oil lifting only reached 831,000 barrel per day).
Indonesia has to import oil from Singapore due to the latter’s huge refinery capacity. Even though Singapore does not have oil fields, its refineries’ capacity reaches 1.4 million barrels per day, allowing for crude oil imported from the Middle East, data from the Energy Information Administration showed.
Former Deputy Energy Minister Arcandra Tahar said Saudi Arabia supplied 41 per cent of Indonesia’s crude oil, followed by Nigeria (29.4 per cent), Australia (14.2 per cent), and Algeria (five per cent), as cited in Tirto last February.
Despite the declining oil output, Indonesia needs to build new refineries
PT Pertamina is committed to building five refinery projects: One grassroots refinery in Tuban and the Refinery Development Master Plan (RDMP) in four areas — Cilacap, Balongan, Balikpapan, and Dumai, — in a bid to reduce reliance on oil import, Katadata reported.
Mr Bisman said that currently, the state-run oil company has six refineries supplying domestic oil needs.
“However, those are ageing refineries,” he said, adding that the development is still ongoing.
Pertamina megaprojects and petrochemical director Ignatius Tallulembang said that the company’s refinery installed capacity reaches one million barrel per day. However, the optimum operation only processes 850,000 barrels per day, adding that the youngest refinery was built 30 years ago.
What’s next if oil runs out?
Indonesia continues to develop renewable energy sources such as solar panels to reduce reliance on fossil fuel. The country’s potential new and renewable energy sources reach over 400 GW.
INDEF researcher Rusli Abdullah suggested in the Market Review IDX Channel on 27 October that the country should push the use of new and renewable energy in all sectors, especially in the transportation sector.
Limited support for research and development has hampered the development of renewable energy, as Simon Sembiring, former director-general of Mineral and Coal at the Ministry of Energy and Mineral Resources (ESDM) told TOC on 16 October.
“When I was at the ministry’s R&D body, we researched liquified coal, and it went successfully on a lab scale. But after that, I don’t know,” he said.
The former official added that the ministry can focus on solar panel—as the department is preparing the installation of solar panel rooftop for household sectors—and biodiesel to speed up the development of alternative energy.