Abstract

Net Oil Importer is still a popular issue among Indonesian businessman today. This is a critical situation for Indonesia considering oil and gas exports are a significant contribution to the Indonesian economy. To anticipate a solution to the issue of oil importation, upstream oil and gas production from existing fields as well as exploration for new reserves must be encouraged. To achieve this goal, both financial and technical barriers must be overcome.

The financial challenge is that increases in exploration activity correlate with higher prices. A global economic philosophy exists among producing oil companies which prioritizes funding to maximize production rather than exploration. A crucial technical challenge is finding economic oil reserves in mature areas. This challenge contrasts with the exploration efforts in frontier areas, most of which are in Eastern Indonesia, where the challenge is very complex geography and geology. There is still opportunity in both Western and Eastern Regions. During the past five (5) years, some commercial oil and gas reserves have been discovered in Western as well as Eastern Indonesia. Other exploration opportunities exist in deep water areas, Pre-Tertiary reservoirs and existing prospects and leads.

The total oil reserves within producing fields as of January 1998 amount to 9482 MMBO which at current production rates will be completely produced by 2017. By adding 708.5 MMBO of reserves which have not yet been developed and including predicted future exploration success, total available reserves would last until the year 2034. Remaining proved and potential gas reserves amount to 106 TCF. At the current production level of 2550 BCFG/day, gas reserves will be exhausted by year 2040. If the current gas discovery rate of 3353 BCFG/year is projected into the future, gas production could be maintained until 2058.