Indonesia, Southeast Asia's only the Organization of Petroleum Exporting Countries (OPEC) member, may become a net oil importer this year as projects led by ConocoPhillips, Unocal Corp and PetroChina Co fail to stem falling output, helping to boost fuel prices to records.
The country may turn to importing a net 61,000 barrels a day this year from net exports of 27,000 barrels a day in 2004, based on figures prepared for the Energy and Mineral Resources Ministry.
Indonesia is draining oil from global markets at a time when China's soaring demand helped to push prices to a record US$58.28 a barrel on April 4. To revive exports, President Susilo Bambang Yudhoyono must resolve contract disputes that have curbed spending by companies including Exxon Mobil Corp.
"Without new investments, Indonesia will this year probably end up as a net importer of oil," Wahyudin Yudiana Ardiwinata, chief executive of ChevronTexaco Corp's local unit, PT Caltex Pacific Indonesia, said in an interview on Wednesday in Jakarta. Caltex pumps half of Indonesia's oil.
Indonesia has failed since early 2002 to meet its output quota, currently at 1.425 million barrels a day, from OPEC. An end to Indonesia's status as an oil exporter would threaten its membership of the group, led last year by Indonesia's Oil Minister Purnomo Yusgiantoro.
Global oil prices have reached records because of limited spare output capacity among OPEC's members and increased demand from China, whose imports have risen over the past decade from zero to 41 per cent of local consumption. Domestic production has failed to keep pace with demand that
more than doubled to about 6.38 million barrels a day in 2004. In Indonesia, projects led by ConocoPhillips, Unocal and PetroChina will not produce as much oil as expected this year, the energy ministry document said.
Oil imports in 2005 may jump 15 per cent to 472,000 barrels a day, while exports are likely to drop by 6 per cent to 411,000 barrels a day. Last year, exports were unchanged at 437,000 barrels a day, as imports climbed to 410,000 barrels a day from 362,900 barrels a day.
Indonesia's production of oil and condensates slid to 1.1 million barrels a day in February from 1.67 million barrels at its peak in 1976-1977.
Meanwhile, Exxon, the world's biggest publicly traded oil company, may stall development of Cepu, Indonesia's largest untapped oil deposit, for a fourth year because the state oil company, PT Pertamina, is demanding a bigger stake before extending a project license.
Exxon's dispute is among the factors that cut oil exploration spending to a 23-year low, or less than US$500 million in 2004, according to the Indonesian Petroleum Association's data. Also, ChevronTexaco and the association's 39 other active members want payment of about US$200 million in refunds for value-added tax going back as far as 2001, disrupting budgets and undermining confidence in the administration.
"The irony is not that Indonesia doesn't have oil and gas but there's no investment dollars going in to look for it," said Hans Vriens, managing director of Apco Indonesia.
Source: China Daily