Below is a list with tagged columns and company profiles.

Today's Headlines Oil

  • Government's 2014 Macroeconomic Assumptions Ambitious but Unrealistic

    The macroeconomic assumptions that have been formulated in the 2014 State Budget Draft by the government of Indonesia are not considered too realistic by several analysts. Although it is understood that one should set a high standard in order to maximize efforts, analysts feel that - given the current problematic economic context in Asian emerging economies as well as global economic turmoil - the government is far too optimistic, particularly because the government will have to devote part of its attention to the elections in mid-2014.

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  • Ongoing Concerns: Trade Deficit of Indonesia May Continue in 2014

    The government of Indonesia is concerned that the trade deficit in the oil and gas sector that was posted in the first six months of 2013, will continue in the second half of the year and will also disturb the trade balance in 2014. Indonesia's oil and gas sector posted a deficit in Semester I-2013 of USD $5.82 billion, while the non-oil and gas sector posted an USD $2.51 billion surplus. Minister of Trade Gita Wirjawan believes that Indonesia's trade deficit may reach beyond USD $5 to $6 billion this year.

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  • Lower Oil Imports in Q3-2013 will Support Indonesia's Weakening Rupiah

    The Indonesian government assumes that the recently increased prices of subsidized fuels will translate into lower oil imports from the third quarter of 2013. Lower oil imports will result in lower demand for foreign currencies and, as such, will support Indonesia's currency, the rupiah. The value of the IDR rupiah is also influenced by market participants' expectation of inflation. Indonesia's central bank (Bank Indonesia) projects inflation to rise to 2.77 percent in July, and to slow down to 1 percent in both August and September.

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  • Pertamina; the Largest State Owned Enterprise of Indonesia

    Pertamina, an integrated energy company, is the largest state-owned company of Indonesia. It conducts operations in the exploration and production of oil & gas, both national and international, and is also active in the development of renewable energy sources, such as geothermal energy and coalbed methane (CBM) gas. Pertamina's downstream activities cover processing, marketing, trading and shipping of its commodities. Its oil and gas exploration activities are conducted through its subsidiaries Pertamina EP, Pertamina Hulu Energi and Pertamina EP Cepu.

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  • Moody's: Indonesia's Budget Deficit Under Control After Fuel Price Hike

    Credit rating agency Moody's Investors Service stated in a report released on Monday (24/06) that it is positive about the impact of the increase in price of subsidized fuel in Indonesia. Through this measure, the budget deficit of the Indonesian government is estimated to remain within 3 percent of GDP (the maximum threshold that is set by the government). Last Saturday (22/06), the price of gasoline was raised by 44 percent to IDR 6,000 and the price of diesel by 22 percent to IDR 5,500 despite widespread protests across the country.

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  • New Macroeconomic Assumptions in Indonesia's Revised State Budget

    After a long plenary session on Monday (17/06), Indonesia's House of Representatives (DPR) and the government have agreed to the revised 2013 State Budget (APBN-P). The revision was needed as original macroeconomic assumptions began to fall out of tune with reality. Due to global and domestic conditions a number of assumptions needed to revised down. Most controversial decision that was taken is the increase in price of subsidized fuel by 44 percent to IDR 6,500 (USD $0.66) per liter.

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  • Indonesia's House of Representatives Approves Price Hike Subsidized Fuel

    Late on Monday evening (17/06), the increase in the price of subsidized fuel, as stated in Law No. 19/2012, was approved by Indonesia's House of Representatives (DPR) through a voting session as political parties could not agree collectively on the price hike as well as on cash programs for the poor to mitigate effects of the higher fuel price. Demonstrations against the price hike were staged in various regions. In Medan (North Sumatra), Jambi (Central Sumatra) and Ternate (North Moluccas), it led to clashes between the police force and protestors.

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  • No Decision Yet on Price Increase Indonesia's Subsidized Fuel

    The plenary session of Indonesia's House of Representatives (DPR) is still ongoing as the various political parties could not agree yet on the increase in the price of subsidized fuel. Five political parties agree to the price hike, while four others have rejected it. If the political parties can not agree to the proposal, then it will be decided by individual voting starting from midnight (Indonesian time). The price hike has been long awaited as a measure to relieve pressure on Indonesia's budget deficit.

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  • Indonesian Government Announces Subsidized Fuel Price Hike on Monday

    Today (15/06), it was reported in Indonesia's media that the government will announce details regarding the new price of subsidized fuel on Monday (17/06) after a plenary session of the House of Representatives (DPR). The Union of Indonesian Workers (Konfederasi Serikat Pekerja Seluruh Indonesia) has announced that it will stage a large demonstration on 17 or 18 June at the DPR/MPR building (the seat of the government) in Indonesia's capital city as well as smaller demonstrations in various cities across the archipelago.

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  • Banyu Urip Field Output Boosts Indonesia's Oil Production From 2014

    Oil production in Indonesia is targeted to be lifted to 1 million barrels per day (bpd) by October or November 2014 according to SKK Migas, the government unit that manages upstream activities in Indonesia's oil and gas sector. Crude oil production in the first quarter of 2013 was 830,900 bpd, eight percent lower than the target in the country's state budget. Indonesia's oil output has fallen steadily in the last decade due to a lack of exploration and other investments in the sector that was once the engine of Indonesia's economic growth.

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Latest Columns Oil

  • Indonesia Tenders 21 Oil & Gas Blocks; Overview of the Indonesian Oil Sector

    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.

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  • Safeguarding Financial Stability: Some Notes on Indonesia's Trade Balance

    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.

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  • Without Reform, Indonesia's Oil Imports Reach 1.6 Million Bpd by 2020

    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.

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  • Palm Oil Rich Indonesia Can Become a Global Force in the Biodiesel Industry

    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.

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  • Analysis of Indonesia's Current Account Deficit: the Structural Oil Problem

    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.

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  • Indonesian Government Revises Down Crude Oil Production Target 2014

    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.

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  • Indonesian Economic and Financial Update: Challenges in October

    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:

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  • Government of Indonesia Serious to Develop Palm-Based Biodiesel

    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.

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  • Bank Indonesia Press Release: August Trade Surplus, September Deflation

    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).

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  • Indonesia Has to Focus to Offset Impact of Quantitative Easing Tapering

    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).

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