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Recent trends in consumption showed that world demand for petroleum peaked in 1979-80. However, as industrialized nations emerge from the current economic recession, and as
development continues in the developing and underdeveloped countries, a resumption in the demand pattern is likely. This economic growth will need increasing amounts of energy over the remainder of this decade and the majority of that requirement will be met by oil and gas, although other forms of energy will have more rapid growth. Despite the current "oversupply" condition, exploration and development expenditures have continued to grow and have been rewarded by additional discoveries such as in Mexico, the North Sea, offshore Indonesia and North America.
In Indonesia, exploration and development expenditures are at an all-time high and the success ratio is considered above average; secondary recovery projects are underway; production of oil is again on the increase after a slight falling off since 1978. However, the rate of growth of domestic requirement for oil is tapering off as higher selling prices have been fixed and as diversification to other forms of energy have shown positive results.
Indonesia will continue to be an oil and gas exporter throughout the 1980s, but not in significant quantities relative to total world requirements. In the Pacific Basin, however, Indonesia is the leading exporter and is likely to continue in that capacity. As a member of ASEAN, Indonesia has been especially responsive to the needs of the other member countries.
Indonesia's contribution to the development of modern oil industry practives have also been meaningful. The production sharing concept, which was pioneered in Indonesia, was later adopted by many other host countries. This form of contract established the basis for cooperation and trust between the parties.
Having oil and gas resources is both an opportunity and a responsibility. Indonesia intends to make the most of the opportunity by exporting as much oil and gas as possible, but only in a responsible way by providing a steady and reliable source of supply to its neighbors in the Pacific Basin region.
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