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Asian Petroleum Review : Jan-March 2011
"The problem in Indonesia has been, other than these big projects (Cepu, Tangguh), there's been no other big new sources of crude oil, " said Stu- art Traver, principal adviser at upstream consul- tancy Gaffney Cline and Associates. Exxon Mobil Corp expects peak oil production of 165,000 bpd from its Cepu block, one of the oil major's top 10 projects worldwide, to be delayed until end-2013, with current production seen around 20,000 bpd. Indonesia needs a plan to spur operators to ei- ther explore more or try to enhance production in their own existing fields, Traver said. "A big, big part of Indonesia's future is how they get companies to explore and develop discover- ies in the deepwater," he said, referring to the waters off eastern Indonesia. "The older production-sharing contracts are very good when you don't have to make those large upfront costs," he said. "But then, deepwater you have to spend a lot of money upfront." BETTER AT MANAGING SUPPLY State-run Pertamina is building three storage tanks with a capacity of 400,000 barrels each to store imported sweet crude such as Azeri Light for the Balongan refinery, a company official- said. These are likely to be completed next March. The company is also studying the feasibility of crude blending tanks to better manage supplies as domestic oil output is becoming more sour in quality, the official said. Ample crude storage will allow Pertamina to better control costs and cushion the impact of price swings, a practice commonly seen in big consumers such as China, South Korea and Ja- pan. "We're entering a time for a more complicated crude slate," Vautrain said, adding the tanks will help to segregate sour and sweet crude. Indonesia has been trying to ease its reliance on costly crude imports - - made more urgent by record-high oil prices in 2008 - - by trying to tap more domestic supply for refineries and cut use of oil products for power and fertiliser produc- tion by switching to coal and gas. The country aims to use renewables for a quar- ter of its total energy mix by 2025, up from an initial target of 17 percent, with coal at 32.7 per- cent and gas at 30.6 percent. "In the short term, it will rise. For the medium- to longer- term, it might go down," said Singa- pore-based Deloitte Petroleum Services analyst Alex Siow, referring to crude imports. A wider energy mix as the country develops its unconventional gas reserves and infrastructure is likely to cut or stabilise crude imports within 10 years, he added. Indonesia's oil product demand is expected to slow or even fall over the next five years as it tries to cut use of imported diesel in power gen- eration, said H.S. Yen, analyst at Singapore- based consultancy FACTS. "A big, big part of Indonesia's future is how they get companies to explore and develop discoveries in the deep- water" - Stuart Traver, Gaffney Cline and Associates