gas wells drilled. For instance, 439 gas wells were completed in 2008—a significant increase from the 2003 level of 23 wells (OPEC 2008). Several attempts to culminate the effect of oil depletion were applied, including deepwater exploration, enhanced oil recovery incentives,34 and the offering of new exploration bids.35 This shift toward gas resources was mostly evident in exports, and less so in the local market where the dependency on oil remained relatively high. Until 2002 oil satisfied 75 percent of the local need for energy (Suryantoro and Manaf 2002). This dependency on oil, however, declined in 2010 to reach 58 percent, indicating a shift to natural gas. This drove down gas exports, leading Indonesia to lose its number-one rank as the world’s largest exporter of liquefied natural gas (LNG) and it become the world’s second-largest exporter in 2010 (PwC 2012b). In terms of employment, the oil and gas sector employed over 300,000 Indonesian workers (IPA 2012b). 3.2.2 Petroleum Geography
Indonesia is an archipelago composed of a collection of islands located between the Asian continent and Australia. The overall Indonesian territory consists of 13,700 islands and has a total land area of 1,919,317 square km (Satiotomo 1999). The islands are grouped according to their proximity to the five main island groups. In the east there is Sumatra Island. The capital, Jakarta, is located on the central Java Island, and to its north rests the central Kalimantan—the region of Indonesia sharing borders with Malaysia’s Sabah in the north. Sulawesi is the smaller island located east of Kalimantan, and New Guinea is toward the far eastern section bordering Papua New Guinea. Petroleum basins are spread across the whole country and are intertwined on both onshore and offshore locations. The main basins are:
North Sumatra Basin Central Sumatra Basin South Sumatra Basin The Natuna Sea Sunda and Asri basins Northwest Java Northeast Java Barito Basin Kutei–Mahakam Delta Basin Tarakan Basin Eastern Indonesia: Bula (Seram), Salawati, Bintuni, and East Sulawesi Basins.
The large oil basins are the North and Central Sumatra basins located north of Sumatra Island, and the Kutei basin located in the east coast of the Kalimantan region. Basins with oil reservoirs of between 1 and 5 billion barrels are the Southern Sumatra basin, the Northern Java basins, the East and West Natuna island basins located in the South China Sea, and the Bintuni basin in the east shore of New Guinea. The rest of the basins contain oil deposits below 1 billion barrels, and there are around 18 basins spread across the country. The largest in terms of deposits within the smaller category below 1 billion barrels are the Timor Sea basin in the south east, the Ceram and Sarawati basins located east of New Guinea, and the Barito and Tarakan basins located east of Kalimantan (Dousta and Noble 2007). Gas basins, on the other hand, are located in North, Central, and Southern Sumatra, in addition to Southern Java, Kalimantan Sulawesi, and Northern New Guinea (Yusgiantoro 2012). The largest in terms of reserves are the Sumatra and New Guinea gas basins. Most oil and gas fields are located onshore and in offshore shallow waters (Nordas, Vante, and Heum 2003).
34
Removal of taxes on capital goods involved in the process. Thirty-one offshore blocks were released for bidding in October 2009. The majority of the new releases were in deep-water basins. 35
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