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SUPPLY
As a member of OPEC Indonesia restricted oil production
in the 1980s but the country is now past peak and producing as much as
it can. This is mostly from onshore Sumatra, and onshore and offshore
Java and Kalimantan. The Cebu development onshore Java is expected to
briefly arrest decline whilst deep water fields in the Makassar Strait
off Kalimantan, is leading to a jump in offshore output. However, over
the longer term, continued decline is forecast.
Although flat for the last decade there are still several areas in which
gas production can grow. The giant Arun gas field in Sumatra is nearing
the end of its life but gas from the Natuna Sea (mostly piped to
Singapore), from an LNG plant in Guinea, and from new investment in LNG
capacity on Kalimantan and elsewhere, will be sufficient for offshore
output to grow.
DEMAND
Oil
and gas consumption were both growing strongly in Indonesia as it
developed along with other Southeast Asian nations. However, a sharp
downturn in oil consumption in 2007 as a result of higher prices, has
slowed growth and demonstrated the country's vulnerability to reductions
in the capacity of its indigenous production. A return to slow growth is
forecast followed by decline after 2015. The country is swinging between
a net importer and exporter year to year with the import bill
constraining economic growth in a country used to export revenue and
cheap oil.
Conversely gas consumption is expected to continue to grow whilst gas
exports are also increasing as new LNG capacity comes onstream.
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