Sarajevo Business Forum: Indonesia looking to boost oil production, but interested in renewables as well

Offshore Energy Today reporters met with Indonesian delegation during Sarajevo Business Forum where we took an opportunity to talk about the Indonesian energy sector.

We spoke with Helmy Shebubakar, Vice Chairman of the Indonesian Chamber of Commerce & Industry, and Azhar Lubis, a representative of Indonesia Investment Coordinating Board.

Lubis said Indonesia is looking to boost its oil and gas production to over a million barrels a day in the near future.

To remind, production last week started from Eni’s Jangkrik field, off Indonesia, where production from ten deep-water subsea wells, connected to a Floating Production Unit Jangkrik, will gradually reach 450 million standard cubic feet per day (mmscf/d), equivalent to 83,000 barrels of oil equivalent per day (boed).

Shebubakar acknowledged that the oil companies are cutting down on exploration due to low oil prices, but added there are opportunities in the brownfield sector, that is, taking another look at the already developed fields to see if there’s potential to produce more oil using new technologies.

We asked about the Abadi offshore gas project, which was recently returned to square one, after the Indonesian government instructed Inpex and Shell to develop the field with an onshore processing facility instead of the originally planned FLNG.

Commenting on the Abadi project, Azhar Lubis said it was a proof that Indonesia is not only looking to boost production no matter what, but instead it cares about its people as well, meaning more people will be employed with an onshore development, and the region around the development will flourish.

He said the federal government listened to the local voices, and decided it was best to have the field developed via an onshore facility.

Also, Indonesia recently sued the Australian subsidiary of the Thai PTTEP, seeking $2 billion dollars in damages for a 2009 oil spill. PTTEP has denied the oil spill had any effect on the Indonesian coast.

Asked to comment on the suit, and the PTTEP stance, Lubis said it was an expected response from PTTEP, and that court would decide the outcome.

Renewables

On the renewable energy sector, Shebubakar said that Indonesia, while heavily dependant on fossil fuels, is trying to shift or at least to move its energy policy towards more environmentally friendly sources of energy, renewables.

When it comes to that, main focus is geothermal, as Indonesia is situated in a volcanic area, and has many geothermal sources.

Shebubakar also said the country’s location also means Indonesia has a large solar power potential.

He said Indonesia is thus interested in developing solar, and is looking for foreign investors which would develop solar cells. For now, the portion of solar energy is very small, compared with the capacity we have, Shebubakar said.

He also said that the government is offering attractive incentives for the foreign parties willing to invest in renewables. Furthermore, Shebubakar acknowledged Indonesia’s offshore wind potential, while not close to the one of the North Sea, is being looked at, as well.

What is more, he said, Indonesia’s big population of more than 260 million means it produces a large amount of domestic waste, which could be converted to energy or power.

However, he said, for now, the country is lacking the system to generate power or energy from this waste, especially because the waste in Indonesia is not separated as in Europe. He also said Indonesia can learn a lot from the European experience.

Furthermore, Shebubakar said Indonesia is also exploring offshore thermal energy conversion and tidal and wave energy potential.

 

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Posted on May 24, 2017

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