17 November 2019 (closed)
USD/IDR (14,091) +16.00 +0.11%
EUR/IDR (15,600) +34.61 +0.22%
Jakarta Composite Index (6,128.35) +29.40 +0.48%
The government of Indonesia will revise its crude oil production target in 2014 to 820 thousand barrels per day (bpd), down from its previous target of 870 thousand bpd. The main reasons for this downgrade are the country's mature oil fields in combination with a lack of exploration as well as other investments in this sector. Indonesia, once an important oil exporting country and member of the OPEC, has seen its oil output decline drastically over the last decade, thus becoming a net importer as the country's domestic consumption continues to rise.
Deputy Minister of Energy and Natural Resources Susilo Suswoutomo said that the government's target needs to be revised down as the country's oil fields mature. The revised target of 820 thousand bpd already includes production of the Cepu Block. This block contains the largest oil reserves that Indonesia is yet to exploit and therefore is expected to contribute significantly to Indonesia's production rates in the future (previously it was estimated that this block will add 165,000 bpd to the country's total crude oil output). In November 2014 the Cepu Block is expected to start production. Originally, this block was planned to commence operation in May 2014 but due to regulatory, human resources and social issues it was delayed. This delay is also an important reason why the government's oil production target needed to be revised down.