Foreword

The country has become a net importer of oil in the past several years  as a result of a decline in production when domestic consumption is growing fast.  Many  oil fields have been abandoned  after being almost depleted.  Those remaining are less productive. Meanwhile  no significant discovery of new oil reserve  has been made with no enthusiasm in explorations.

Unfortunately the country has become a net importer of oil when the prices of that commodity are soaring .  The prices of crude oil has leapfrogged from record level to another record high  reaching  US$135 a barrel early June.  Observers predicted the price could go as high as US$150 a barrel.

Indonesia was once a major producer and exporter of oil  and member of OPEC. In  1992, the country produced up to 1.5 million barrels of crude oil and condensate  and of  which 796,000 barrels were exported.  Now the production  was less than 1 million falling much short of domestic consumption.  The fact has forced  the government to quit OPEC recently.  The government has also been forced to revised the state budget several times for this year  because of the leapfrogging increase in the oil prices.

The government has persuaded contractors to pump out more oil hoping that the country could regain its position as an exporter  or at least reduce spending for oil imports.  It has also offered  and pledged to offer more incentives  to encourage  explorations .  However,  reports from the oil fields have been less than encouraging. In fact most oil contractors in the country  failed  to achieve their production targets in the first four months of 2008.  The daily production of  22  of 37 oil  contractors  in the country  fell short of their targets, reports said. Among those failing to reach  their production target included  state oil and gas company PT Pertamina,  France-based Total E&P  Indonesie , Medco E&P  and British oil giant BP.

Encouraging report, however,  came  from   the  country’s largest producer Chevron Pacific Indonesia , which overshot its target  of 408,800 barrels  with production averaging 414,765 barrels per day during that period.

The  government has set production target for crude oil and condensate at 977,000 barrels per day   this year. Even if the target is achieved the country will still need to import considerable quantity of crude oil to feed  Pertamina’s oil.

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Table of Content

I. INTRODUCTION
1.1. Background
1.2. Scope of Study
1.3. Data and Information sources

II. THE ROLE OF ESDM SECTOR IN THE NATIONAL ECONOMIC DEVELOPMENT  2005 – 2008
2.1. National Energy Production 2007 – 2008
2.1.1. National Mineral Production 2007 – 2008
2.1.2. Target and Realization of Electric Energy Production  2007-2008
2.1.3. Target and Realization of National Mineral Production  2007-2008
2.2. Export-Import of National Energy 2005-2008
2.2.1. Energy Export 2005-2008 2.2.1.1. National Mineral Export 2005-2008
2.2.2. Energy Import 2005-2008
2.3. Target and Realization of Nation Income from ESDM sector 2005-2008
2.3.1. The contribution of ESDM sector to the National Economic 2007
2.3.1.1. Macro Economy
2.3.1.2. Micro Economy
2.4. Investment picture of ESDM sector 2005-2008
2.4.1. Acceleration and Realization of Oil and Gas Investment 2008
2.4.2. Realization and Investment Plan of ESDM sector 2006-2008
2.5. The Performance of Oil Fuel and Electricity Subsidy 2005-2008
2.5.1. Subsidy cost of Domestic Oil Fuel, LPG, and Electricity 2007-2008

III. RESERVE AND NATIONAL UPSTREAM OIL AND GAS ACTIVITIES
3.1. Approach and Role of Oil and Gas in National Economy 2007
3.1.1. Upstream Oil and Gas Activities
3.1.2. Revision Finishing Target of Oil and Gas Work Guidance 2007
3.2. Indonesia Crude Oil Reserve
3.2.1. Location Map of Crude Oil Reserve as of January 1, 2006
3.2.2. Proven Reserve and Crude Oil Potency 2003-2007
3.3. Indonesia Geothermal Reserve
3.3.1. Location Map of Geothermal Reserve as of January 1, 2006
3.3.2. Proven Reserve and Geothermal Potency 2003-2007
3.4. Upstream Oil and Gas Activities
3.4.1. Investment in Upstream oil and gas
3.4.2. Revision Finishing Target of Oil and Gas Work Guidance 2007
3.4.3. Supply map of 26 Oil and Gas Work Areas 2007
3.4.4. Contract Signing of Oil and Gas Work Area 2003-2007
3.4.5. 18 winners of Oil and Gas Work Area
3.4.6. Contract Signing of PSC and JOB/JOA 2003-2007
3.5. Oil and Gas Exploration Business Activities
3.5.1. Seismic Investigation Activities
3.5.1.1. Seismic 2D Km and Seismic 3D Km2 and oil well 2003-2007
3.5.2. Exploration Drilling 2007
3.5.3. Plan of Development (PoD) 2007
3.5.4. Agreement Process of PoD I 2007
3.5.5. KKKS PoD I Investment Graph
3.6. Inventory Progress of Methane Gas B(MGB) Exertion in Indonesia
3.6.1. Legal Ground of MGB Exertion
3.6.2. MGB Condition in Indonesia
3.6.3. MGB submission to Gas Regime
3.6.4. MGB Exertion Pattern
3.6.5. MGB Work Area in Indonesia
3.6.6. Offering system of MGB Work Area
3.6.7. Problems and Solution Alternatives

IV. EXPLOITATION ACTIVITIES AND NATIONAL OIL AND GAS PRODUCTION
4.1. Development of Oil and Gas Drilling 2001-2007
4.2. Crude Oil Production and National Condenser 2001-2007
4.2.1. Crude Oil Production based on Companies 2007
4.2.2. Composition of National Oil Production based on KKKS 2007
4.3. National Crude Oil Production Target 2008
4.3.1. Nine New Field Increase National Oil and Gas Production 2008
4.3.2. Reactivation of Five Thousand Old Oil Wells 2008
4.3.3. Pertamina is a Minority in Natuna D-Alpha Block
4.4. Production and Geothermal Utilization 2003-2007
4.4.1. National Gas Balance
4.4.2. Indonesia Gas Production 2007
4.5. National LPG and LNG Production 2001-2007
4.6. Oil and Gas Production Increase 2001-2007
4.6.1. Plan of Production on Stream 2009
4.6.2. Field List On Stream 2007
4.6.3. Field List On Stream 2008
4.6.4. Field List On Stream 2009 Onward

V. CONDITION OF UPSTREAM NATIONAL OIL AND GAS MARKET
5.1. Export and Import of National Crude Oil
5.1.1. Crude Oil Export 2005-2008
5.1.2. Indonesia Crude Oil Import 2005-2008
5.1.3. Crude Oil Consumption of Domestic Refinery
5.1.4. Crude Oil Price Condition in Indonesia
5.2. National Geothermal Export
5.2.1. Geothermal Export 2005-2008
5.2.2. Production and Utilization of Geothermal 2001-2007
5.2.3. Domestic Gas Price Condition 2005-2008
5.2.4. Sales Target of Nation Gas Company (PGN) 2008 increased 73%
5.2.5. Progress and Finalizing the Contract Extension of Indonesia LNG to Japan 2011-2021
5.2.6. Export Price of Gas Premier Oil to Sembawang Corp of US$ 38 per barrel
5.2.7. Pertamina E&P and Cool Energy probe Joint Operation of Gas Purifying
5.2.8. Trade-offs Price Negotiation of LNG Senoro
5.2.9. CNOOC Agreed on LNG Senoro Price
5.2.10. CNOOC Gained US$ 40 million on 2% of Talisman Share in LNG Tangguh
5.2.11.  BPMIGAS appealed Inpex to accelerate PoD LNG Masela Refinery

VI. CONDITION OF NATIONAL OIL REFINERY PRODUCT (DOWNSTREAM OIL)
6.1. Domestic Oil Refinery Capacity 2007
6.2. Domestic Oil Refinery Production 1997-2008
6.3. National Oil Product Export 2007
6.4. Oil Product Import 2007
6.5. National Oil Fuel Consumption Based on Sector 2003-2007
6.6. National Energy Mix 2005-2025
6.7. Global Oil Price Fluctuation, OPEC Production, and APBN Deficit 2008
6.7.1. Global Oil Price potentially reaches US$ 200 per barrel
6.7.2. Nation Income from Oil and Gas, Lifting, and APBN Subsidy 2008
6.7.3. RAPBN-P 2008, Subsidy fluctuation, and Oil Fuel Price Increase Option
6.7.4. RAPBN-P 2008 and the risk of Oil Fuel Price Increase
6.7.5. Optimizing Oil and Gas Contribution for RAPBN-P 2008
6.7.6. The Change of Base Assumption of Macro Economic in RAPBN-P 2008
6.7.7. Securing RAPBN-P 2008 needs Rp 15 trillion
6.7.8. The Parliament Agreed on the APBN-P 2008 Assumption
6.7.9. Optimizing the Nation Income, Lifting, and APBN-P 2008 Subsidy
6.7.10. Domestic PSO Oil Fuel Increase and Subsidy Saving 2008
6.7.11.  Global Oil Price Rate and Revision of APBN-P 2008
6.7.12.  Oil Hedging, A Strategic Effort of Securing APBN-P 2008
6.7.13.  APBN-P 2008 Will Be Revised Next July
6.7.14.  APBN-P 2008 and Global Economic Tune
6.7.15.  Non PSO Oil Fuel Price Fluctuation disorganized the National Industry Production Plan

VII. DOWNSTREAM NATIONAL GAS CONDITION
7.1. Domestic LPG Refinery Capacity 2007
7.2. Domestic LPG Production 2001-2007
7.3. LPG Export 2003-2007
7.4. LPG Import Based on Originating Countries 2004-2007
7.5. Domestic LPG Consumption Based on Sector 2006-2007
7.6. Pertamina and A Picture of Kerosene to LPG Conversion Problem 2008
7.6.1. The Scarcity of Gas Tube and LPG Pushed The Price Boost
7.6.2. Price Disparity and Abuse PSO LPG 2008
7.7. Four BUMN Ready to Produce 3 kg LPG Tube for Conversion Program 2008

VIII. UPSTREAM NATIONAL OIL AND GAS POLICY 2008
8.1. Revision Finishing Target of Oil and Gas Work Guidance 2007
8.2. Six Blue Prints of Reformation in National Energy Sector 2008-2009
8.3. Pertamina and New Body Tender Oil Import 2008
8.4. Performance of New Oil and Gas Contract Limited Cost Recovery
8.5. National Gas Policy

DOWNSTREAM NATIONAL OIL AND GAS POLICY 2008
8.6. Kerosene Control Card Program Valid in April 2008
8.7. Smart Card Is Postponed between June, July up to September 2008
8.8. Social-Politic and Economic Impact on the Limitation of PSO Oil Fuel 2008
8.9. Program of Limitation and Unsafe Deviation of PSO Oil Fuel
8.10. The Role of BPH Migas, Pertamina,and Scarcity Phenomenon of PSO Oil Fuel

IX. NATIONAL OIL AND GAS  PROJECTION
9.1. The Effort of  Oil and Gas Sub Sector in Supporting the Oil and Gas Production Target Achievement 2009
9.2. Oil and Gas Production Increase 2009
9.2.1. Plan of Production On Stream 2009
9.2.2. Field List On Stream 2007
9.2.3. Field List On Stream 2008
9.2.4. Field List On Stream 2009 Onward
9.3. Ten Oil and Gas Field Will Start Production in 2009-2013

X.  CONCLUSION AND RECOMMENDATION

Attachment
• Profile of 79 National Oil and Gas KKKS    Exploration 2007
• Profile of 41 National Oil and Gas KKKS Production 2007
• UU No. 30 Year 2007 About Energy
• UU No. 22 Year 2001 About Oil and Gas