Below is a list with tagged columns and company profiles.
Today's Headlines Oil
On 7 November 2022 Indonesia Investments released the October 2022 edition of its monthly report. Our report presents in-depth and independent analyses of a range of economic, political and social subjects that have been in the news in the month of October 2022.
Indonesia's national crude oil output remains dominated by a select group of companies. The five biggest oil producers in Indonesia - who together account for 73.34 percent of the nation's total oil production - are Chevron Pacific Indonesia, ExxonMobil, Pertamina EP, Pertamina Hulu Mahakam, and the China National Offshore Oil Corporation (CNOOC).
SKK Migas, the government's special taskforce for upstream oil and gas business activities in Indonesia, said direct investment in the country's upstream oil and gas sector reached USD $1.8 billion by the end of February 2018 (equivalent to around 13.84 percent of SKK Migas' full-year 2018 investment target in the country's oil and gas sector).
Indonesia's Energy and Mineral Resources Ministry will revise Energy Regulation No. 8/2017 on the gross split scheme. It was decided to revise this relatively new regulation after an evaluation was conducted that included input from oil and gas contractors. Deputy Energy Minister Arcandra Tahar announced the revision earlier this week.
Indonesian Energy and Mineral Resources Minister Ignatius Jonan hopes to see oil production at the Banyu Urip Field, part of the Cepu Block in East Java, rise to 300,000 barrels per day (bpd), a development that would also trigger the multiplier effect for the region, he added. The Banyu Urip Field is the key oil field in Indonesia as it accounts for about 25 percent of Indonesia's total crude oil output.
The price of coal rose at the end of trading on Wednesday (26/07) in line with strengthening crude oil prices. Coal futures (January 2018 contracts, the most-active contract on the Rotterdam commodities exchange), finished 0.03 percent higher at USD $73.15 per metric ton. Hence, coal extended its rise after a 1.04 percent increase on the previous trading day (25/07).
Rubber prices rose on Wednesday morning (26/07) as the Japanese yen weakened against the US dollar. The price of rubber (December 2017 delivery, the most-active contract on the Tokyo Commodity Exchange, or Tocom), had gained 1.04 percent, or 2.2 points, to 213.70 yen per kilogram (kg) by 10:26 am local Jakarta time, after opening sideways at the level of 211.50 yen per kg. Yesterday, rubber prices climbed 1.05 percent.
The price of rubber rebounded on Tuesday morning (25/07), in line with the strengthening of crude oil prices. The rubber price (December 2017 delivery, the most-active contract on the Tokyo Commodity Exchange), had risen 2.05 percent to 213.60 yen per kilogram (kg) by 10:05 am local Jakarta time, while earlier this morning, rubber prices had in fact fallen 0.62 percent directly after the opening of trade.
The coal price weakened at the end of trading on Monday (24/07). Coal futures (January 2018 contracts, the most active contract on the Rotterdam commodities exchange), fell 1.84 percent to USD $72.38 per metric ton on Monday, reversing from their performance on the preceding trading session (Friday 21/07) when coal prices rose 0.45 percent to USD $73.74 per metric ton.
Rubber prices tumbled about 2 percent in early trading on Friday (21/07) after surging 4 percent in the previous trading session. The price of rubber for December 2017 delivery, the most active contract on the Tokyo Commodity Exchange (Tocom), tumbled 1.99 percent (or 4.30 points) to 211.90 yen per kilogram at 07:40 am local Jakarta time. Ahead of this tumble, there occurred a rubber price rally as most farmers held back their rubber stock sales following expectations of higher prices.
Latest Columns Oil
General Director of Oil and Gas at the Indonesian Ministry of Energy and Mineral Resources Edy Hermantoro said at the 38th IPA Convention and Exhibition on Friday (23/05) that the Indonesian government plans to tender a total of 21 blocks of oil and gas in a first bidding round in 2014. This involves 13 conventional oil and gas blocks and eight non-conventional (shale) oil and gas blocks. The government expects that these oil and gas blocks will add 3.5 billion barrels of oil and 107.7 trillion cubic (tcf) of gas resources.
Although Indonesia is the world's largest archipelago, contains an abundance of commodities and has the world's fourth-largest population, the country's export and import figures are still small compared to the world's leading exporting and importing countries (see table below). There are many - and much smaller - countries that post much more impressive import and export data. In terms of exports, Indonesia is too dependent on commodities (accounting for around 60 percent of all exports) causing problems in times of price downswings.
Imports of oil will accelerate to 1.6 million barrels per day (bpd) by 2020 if fuels continue to be subsidized by the Indonesian government. This development will seriously burden Indonesia's trade balance (and current account). In 2013, Indonesia posted a trade deficit of USD $12.6 billion in the oil & gas sector. Due to improved performance in the non-oil & gas sector, the overall trade deficit was kept at USD $4.06 billion. Besides placing downward pressure on the rupiah exchange rate, expensive subsidies also burden the state budget.
Indonesia has the potential to become a global force in the biodiesel industry because of the country’s position as the world’s top producer of crude palm oil (CPO). In 2014, Indonesia’s CPO production is estimated to total 30 million tons. Traditionally, Indonesia exports about 75 percent of its total CPO production, particularly to the giant economies of China and India. As such, this commodity is one of Indonesia's most important foreign exchange earners, apart from coal, in the non-oil and gas sector.
Fitch Ratings, one of the three major global credit rating agencies, estimates that Indonesia's current account deficit will reach USD $27.4 billion, equivalent to 3.1 percent of the country's gross domestic product (GDP) in 2014. As such, Fitch Ratings' forecast is more pessimistic than forecasts presented by both Indonesia's central bank (Bank Indonesia) and government. Both these institutions expect to curb the current account deficit below the three percent of GDP mark (a sustainable level). Global investors continue to carefully monitor the deficit.
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.
ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the October 2013 edition, a number of important issues that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt:
Usage of biodiesel for transportation in Indonesia is expected to reach 7.2 million kiloliter by 2015, a sharp increase from 600,000 kiloliter in the first nine months of 2013. State-owned Pertamina is expected to supply the extra 6.6 million kiloliter of biodiesel. The reason why the Indonesian government is eager to develop palm-based biofuel for transportation purposes is to reduce the country's reliance on the import of expensive diesel fuel. Imports of fuels and gas are the foremost reason that Indonesia is coping with a wide current account deficit.
Inflationary pressures eased in September 2013 to a 0.35% rate of deflation (mtm), or 8.40% (yoy). The rate of deflation exceeded the projections contained within the Price Monitoring Survey conducted by Bank Indonesia and much lower than inflation expectations by some analysts. Abundant supply in the wake of horticultural harvests (shallots and chilli peppers), triggered a deep correction in food prices. In addition, sliding beef prices also exacerbated further deflationary pressures, with volatile foods recording deflation of 3.38% (mtm).
On Thursday (19/09), most currencies and stock indices outside the USA were bullish after the Federal Reserve decided to continue its massive monthly USD $85 billion bond buying program. Today (20/09), Asian currencies and stock indices took the foot off the gas as many investors sought to cash in on yesterday's gains. The MSCI Asia Pacific was still able to rise slightly (0.1 percent) after jumping 2.2 percent yesterday, but Indonesia's benchmark stock index (IHSG) plunged 1.86 percent (after gaining 4.65 percent yesterday).
Associated businesses Oil
