As other nations explore for more crude oil to add to their reserves, Indonesia’s stockpile has been in a steady decline during the past two decades, unable to replenish to meet growing demand.
Indonesia’s proven oil reserves have fallen by 1.9 billion barrels since 1991, faster than the rate in any other Asian country, according to British oil giant BP’s annual report on oil and gas. The report, “Statistical Review of World Energy 2012,” was released on Wednesday.
Indonesia, a former OPEC member, had 4 billion barrels of proven oil reserves last year, down from 5.9 billion barrels in 1991. Reserves in China and India dropped by 800 million barrels and 400 million barrels in the same period, respectively, though oil consumption in both countries has historically been higher than in Indonesia.
In last year’s BP report, Indonesia’s reserves for 2010 were 4.2 billion barrels, down from 5.4 billion barrels in 1990.
Analysts and industry executives have long criticised the government for failing to boost oil exploration as most of the country’s oil fields mature.
Pri Agung Rakhmanto, executive director at Reforminer Institute, an energy think tank, blamed government mismanagement for the rapid depletion of the country’s oil reserves. He said the government’s role in the oil sector had resulted in unreliable data for exploration, bureaucracy and uncertainty over long-term contracts.
“The oil sector is supposed to be managed with a business-to-business approach,” Pri Agung said.
Elisabeth Proust, chairwoman of the Indonesian Petroleum Association, called for more incentives in the exploration stage, as oil companies must venture out to new frontiers where potential fields are offshore and often deeper and riskier.
Mexico had the fastest depletion rate in the world, according to the BP report. The country’s reserves plunged to 11.4 billion barrels last year from 50.9 billion barrels in 1991. In the same period, Venezuela’s reserves surged to 296.5 billion barrels from 62.6 billion barrels, overtaking Saudi Arabia with the world’s biggest stockpile.
Malaysia managed to raise its proven oil reserves to 5.9 billion barrels in 2011 from 3.7 billion barrels in 1991, reflecting a 60 percent increase in reserves worldwide.
Indonesia’s oil consumption last year stood at 1.43 million barrels per day, while its refineries have the combined capacity of 1.141 million barrels per day, indicating the need to import to cover the shortfall.
In coal, production has increased at a higher rate than domestic consumption. From 2001 to 2011, BP data show that Indonesia’s coal production rose 251 percent to 199.8 million metric tonnes of oil equivalent, while domestic consumption rose 162 percent to 44 million tonnes of oil equivalent.
Based on the Jakarta Globe’s calculation, the consumption-to-production ratio in 2011 was 22 percent, down from 30 percent in 2001, indicating that more Indonesian coal has been sold overseas.
Pri Agung said the government did not recognise a need to conserve coal.
“The Chinese government realises that coal will be a valuable commodity in the future, so they rely more on imports while shoring up their reserves,” he said.
“Among major coal-producing countries, Indonesia is the only one with growth exceeding 10 percent.”
Edi Prasodjo, director of coal at the Energy and Mineral Resources Ministry, was quoted by Investor Daily last month as saying that the government was studying “the appropriate policy” to limit the growth in coal production.
Coal is the main source of electricity in Indonesia. Last year, coal accounted for 44 percent of the country’s electricity production of 182.6 terawatt hours.
Jarman, director of electricity at the ministry, said last month that the government was planning to increase coal’s contribution to electricity to 64 percent.
According to the report, about 1 million tonnes of oil equivalent of coal can produce 4.4 terawatts of electricity.
Indonesia’s proven coal reserves stood at 5.529 billion tonnes as of 2011, lower than China’s 114.5 billion tonnes or India’s 60.6 billion tonnes. China and India are the two top importers of Indonesian coal.
Indonesia has been raising its stash of natural gas, with proven reserves up 67 percent to 3 trillion cubic meters in the 20 years to 2011. That rate was faster than the world’s 59 percent increase to 208.4 trillion cubic meters.
Gas production was 75.6 billion cubic meters last year, up 19 percent from 2001, while domestic consumption expanded 22 percent to 37.9 billion cubic meters.
The government for the first time has included gas lifting in its proposed state budget for next year.