Looming Oil Crisis Confronts New Government
KATADATA - The new government that will take office after July?s presidential election, will face a daunting task and a heavy burden. They will have to deal with huge workloads left by President Yudhoyono?s government in the energy sector.
Indonesia is currently on the verge of an oil crisis. Indonesia?s crude oil reserves is no longer adequate to meet its need, as it only has 14 percent of its oil reserves left. Within 30 years, Indonesia?s oil reserves has plummeted 68 percent. This is the fastest and the steepest fall in oil reserves in Asia.
The country?s large and leading oil blocks that until now contribute significantly to its total oil production are getting older and their productivity levels have decreased. Various methods and technologies, including enhanced oil recovery, have been implemented to overcome this issue. However, on average, the output of 10 large oil fields managed by multinational companies have sharply declined.
On the other hand, Indonesia?s oil consumption is rising to keep pace with its economic growth, as well as the increases in income and new car demand. At the time when the industry sector seeks to lessen its reliance on expensive fossil fuel, the transportation sector, in contrast, is thirsty for more oil. In fact, the transportation sector?s oil consumption growth reaches 6 percent per year on average. As a result, the transportation sector becomes the most dominant sector or consumes 75 percent of Indonesia?s oil consumption.
The problem is that the impact of the widening gap between Indonesia?s oil output and consumption does not end in the surge in oil or fuel import. The gap has serious, subsequent impacts on the state?s economy.
