Upstream Oil Industry of Indonesia; Once a Key Moneymaker But Now Facing an Uncertain Future
Crude oil is a fossil fuel that is derived from the remains of plants and organisms that lived on Earth millions of years ago (coal and natural gas also formed under similar conditions). Crude oil is found in huge underground reservoirs – either below land or the ocean floor – where ancient seas once existed.
Crude oil (also known as petroleum) has been a crucial element for the world since the beginning of the so-called “oil economy” in the early 20th century when more and more national economies (and thus the world economy) became connected to (or in fact dependent on) the production, refinement, sale, or use of crude oil.
For example, crude oil is needed to produce gasoline, a secondary fuel that is used to power many heat engines (most importantly it acts as a fuel for a large proportion of cars you see on the streets today). However, crude oil is also used for thousands of different items, including tires, refrigerators, life jackets, and anesthetics.
However, the problem crude oil (and other fossil fuels) are facing today is that large part of the world is eager to move away from this dirty fuel in a bid to curb climate change. The problem with fossil fuels is that when they are burned for energy, they release toxic gases and high amounts of carbon dioxide (a greenhouse gas), thereby disrupting the Earth’s natural balance.
Still, the oil and gas industry (exploration and production) ranks among the biggest industries in the world (in US dollar terms) today (albeit it has been slipping in the ranks over the past couple of years). So, despite a growing number of people wanting the world to move away from oil and gas due to environmental concerns, the oil and gas industry is expected to remain playing an important role in the energy sector in the foreseeable future (as the global transition to renewable energy sources cannot be done overnight). This suggests that we will see a long road with a gradual decline in the use of oil in the decades ahead.
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This is the introduction of the article. The article discusses (among other matters):
• Indonesian government's ambitions regarding oil.
• Investment in oil exploration in Indonesia.
• The factors that are behind Indonesia's ever sliding oil production.
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