Projected oil and gas demand surges by over 100%, despite energy transition

Jakarta – Indonesia cannot completely abandon the use of oil and gas, even though it has entered an energy transition period. The demand for oil and gas in the National Energy General Plan (RUEN) by 2050 will increase by more than 100 per cent, government officials say.

Expert of the Minister of Energy and Mineral Resources (ESDM) for Integration, Coordination and Oil and Gas Interface, Nanang Untung explained that the projected demand for oil and gas increased by 139% and 298% respectively in 2050. The national energy needs in that year are estimated to reach around 1,000 Mtoe (Million tonnes of oil equivalent) with a percentage of 44% coming from oil and gas, so there are around 440 Mtoe that must be met.

“To fulfil the oil and gas needs, the government cannot possibly do it alone. We still need investors,” said Untung in the Indonesia Petroleum Association (IPA) meets Blogger discussion.

He said that the fundamental needs to utilise the oil and gas potential in the country are funding and technology because most of them are in new areas that are quite difficult to reach, such as in the deep sea or the mountains.

In addition, Untung continued, upstream oil and gas also provide a lot of state revenue. Based on data from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), direct oil and gas sales contributed around IDR 672 trillion (USD 44.76 billion), consisting of oil and gas sales of around IDR 583 trillion (USD 38.83 billion), including the allocation of oil and gas revenue sharing funds of IDR 17 trillion (USD 1,13 billion) which is also felt by the producing regions and the results of other revenues from upstream oil and gas of around IDR 89 trillion (USD 5.93 billion) which includes signature bonuses, production bonuses, firm commitments, VAT payments, oil and gas PBB, PDRD, and oil and gas income tax and other revenues.

IPA Executive Director Marjolijn Wajong explained that Indonesia’s position as a significant oil and gas producer continues to shift along with the decline in oil production from year to year. In the mid-70s, production could reach more than 1 million barrels per day (bpd) and even 1.6 million barrels, but after passing the 90s, production has continued to decline until now in the range of 600 thousand bpd. But on the other hand, demand continues to increase with the current average demand reaching 1.5 million bpd. “This has caused a considerable burden on the state finances because we have to import oil and fuel,” said Wajong. (Hartatik)

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