Indonesia is important to world energy markets because of its OPEC membership and substantial, but diminishing, oil production. Also, Indonesia is the world's largest liquefied natural gas (LNG) exporter. Through the Natuna and Wiriagar gas field developments, Indonesia will remain an important energy source for Asia well beyond 2000.

GENERAL BACKGROUND
After many years of strong economic growth and expansion, Indonesia is now in the midst of an economic crisis that befell southeast Asia in mid-1997. The gross domestic product (GDP) growth rate estimate for 1997 is 5%, down three points from 1996. For 1998, the GDP growth rate is projected to be -5.5%, with predictions that if economic reforms are not implemented, GDP could fall by as much as 9%-10% annually during 1998 and 1999. Although the 1997 inflation rate is estimated at a relatively modest 6.6%, it is expected to increase to 23.3% in 1998 and remain in double digits for 1999.

The Asian economic crisis reached Indonesia in the fall of 1997. In October 1997, Jakarta turned to the International Monetary Fund (IMF) for assistance in an attempt to restore confidence in Indonesia's economy. The country was granted an IMF-led reform package worth $43 billion that called for significant structural reforms of Indonesia's economy. However, concerns over President Suharto's health emerged in December 1997, exacerbating the situation. On December 9, 1997 the rupiah declined from 4,145 to 4,500 against the US dollar, which at the time was the largest single day drop in the rupiah. The county's currency has continued its decline since then, at one point surpassing the Rp10,000/$ mark, and has yet to stabilize.

Despite commitments to the IMF package, President Suharto issued an expansionary budget for 1998-1999 in early January 1998. The budget assumed a GDP growth rate of 4%, an exchange rate of Rp4,000/$, and an inflation rate of 9%. It did not contain policy initiatives to reform the economy specified by the IMF, and would have run up large deficits. The IMF reacted by announcing that it would withhold the package if economic reforms were not initiated. President Suharto then signed a new agreement with the IMF that included more realistic 1998-1999 budget projections for GDP growth rates, inflation rates and exchange rates. In addition, the agreement called for cuts in fuel subsidies, bank mergers to improve efficiency in the banking sector, and commitments from the government not to provide aid to the heavily indebted private sector. However, President Suharto began backing away from the IMF once again when he dismissed the governor of the central bank on February 17, 1998. Furthermore, he revealed a new plan for restoring the economy through pegging the rupiah to the dollar by means of a currency board. The IMF again announced that it would withhold its loans if President Suharto decides to implement this new plan.

With the economic turmoil continuing, Indonesia has faced social and political problems as well. Prices for food and other necessities have been skyrocketing. A recent report indicates that 2.4 million people have already lost their jobs, and the country is in the midst of a severe drought. Given that Indonesia has experienced social unrest and riots in the past, international observers fear that widespread violence and rioting could be forthcoming. Some localized protests and riots have already occurred and at least five people have died. Moreover, reports indicate that some Chinese entrepreneurs, who are small in number but own much of Indonesia's wealth and are often the targets of protests, have made arrangements to leave the country. If they do leave, the capital flight could make the economic crisis even worse.

Following a ten-day meeting that began on March 1, 1998, the People's Consultative Assembly re-elected President Suharto to a seventh, five-year presidential term. He formally accepted his re-election and was sworn in on March 11, 1998. Following the ceremony, the Assembly formally elected Bucharuddin Jusuf Habibie, the Minister of Research and Technology to serve as Indonesia's Vice President for a five year term.

OIL
Indonesia currently holds proven oil reserves of slightly under 5 billion barrels. This represents a 14 % decline in proven reserves since 1994. Much of Indonesia's proven reserve base is located onshore. Central Sumatra is the country's largest oil producing province and is the location of the large Duri and Minas oil fields. Other significant oil field development and production is located in accessible areas such as offshore northwestern Java, East Kalimantan, and the Natuna Sea. Indonesian crude oil varies widely in quality, with most streams having gravities in the 28^o to 37^o API range. Indonesia's two main export crudes are Sumatra Light, or Minas, with a 35^o API, and the heavier, 22^o API Duri crude.

In 1997, Indonesian crude oil production remained flat at about 1.4 million barrels per day (bbl/d). Crude oil production has ranged between 1.3 and 1.4 million bbl/d since 1990. Indonesia also produces approximately 180,000 bbl/d of natural gas liquids and lease condensate, which are not part of its OPEC quota, bringing the country's total oil production to around 1.6 million bbl/d. Indonesia is now looking to increase its crude oil production following OPEC's 103rd conference, held in Jakarta from November 26 to December 1, 1997. Indonesia's OPEC production quota for the 1st half of 1998 is now set at 1.456 million bbl/d, up from 1.33 million bbl/d.

Indonesia's recent oil production has remained relatively flat as introduction of crude streams from new, smaller fields has helped compensate for declines at many of the country's mature oil fields. To meet its goal of increasing production, Indonesia has stepped up its efforts to sign new oil exploration contracts. The vast majority of Indonesia's producing oil fields are located in the central and western sections of the country. Therefore, the focus of new exploration has been on frontier regions, particularly in eastern Indonesia. Sizable, but as of yet unproven, reserves may lie in the numerous, geologically complex, pre-tertiary basins located in eastern Indonesia. These regions are much more remote and the terrain is more difficult to explore than areas of western and central Indonesia. The government has estimated that it will need $3.5 billion or more per year to locate new oil and gas deposits.

In early 1997, Pertamina signed four Production Sharing Contracts (PSC), two Technical Assistant Contracts (TAC), and extended and improved two other existing contracts. The PSCs awarded acreage to P.T. Caltex Pacific Indonesia (CPI)(North Sumatra), Santa Fe (southern Kalimantan), Netherlands-based Eurafrep (offshore Central Java), and Canada's Petroleum International (offshore North Sumatra). Two existing contracts with Santa Fe (offshore Irian Jaya) and Asamera (Corridor Block, South Sumatra) were extended.

Prior to the OPEC conference in November 1997, Indonesia already had signed 21 new oil and gas exploration contracts as compared to an annual average of 15-16 in the past few years. In December 1997, Pertamina signed 8 more contracts, bringing the total for the year to a record 29. The new contracts consisted of seven, 30-year PSCs and one, 20-year TAC. The PSCs went to Korea Petroleum Development Corporation of South Korea for the Wokam block offshore Irian Jaya, Canada's Talisman Ltd. for the Madura block offshore Madura, Australia's Santos Ltd. to explore Sampang block in Madura, Apex Ltd. to explore the Bengara II block offshore and onshore northeastern Kalimantan, a consortium of Nusamba Kaltim Pratama and Unocal Rapak Ltd. for exploring the Rapak block offshore East Kalimantan, Britain's Kondur Petroleum to explore the Selat Malaka block in the Strait of Malacca, and the US's Union Texas Tomori Inc. to explore the Toili block offshore and onshore Central Sulawesi. The TAC was awarded to a consortium of PT Pancacitra Multi Jaya and PT Energitama Abdi Nusa to develop the Ibul Tenggara field in South Sumatra. PSC recipients have committed to investing around $259 million for exploration and development over the first 10 years. In addition, the contractors also must pay Pertamina $5.45 million for information on the concessions provided by Pertamina, $1.8 million for equipment and services, and $1.01 million to an education fund.

CPI, a Texaco/Chevron venture, is Indonesia's largest foreign operator in terms of production, accounting for 45% of Indonesia's total oil output. In addition to the PSC for the Sibolga acreage in North Sumatra, CPI operates four onshore blocks in the Riau province in Central Sumatra: Siak; Rokan; Coastal Plains Pekanbaru; and Mountain Front Kuantan. CPI currently produces more than 700,000 bbl/d, with most of its output coming from the Duri and Minas fields. However, in September 1997, Pertamina announced that it was ready to take over 10% of the total concession area in Riau. Pertamina expects the take-over to be complete by 2001. In December 1997, CPI announced that it plans to increase crude oil production, raising its total output to just under 800,000 bbl/d by the end of 1998. The company said that its efforts would complement Indonesia's plan to meet its new OPEC quota. CPI also indicated that the increased production would result from the use of more advanced enhanced oil recovery (EOR) technology in its 10 largest oil fields including Duri and Minas.

CPI continues to maintain and expand its Duri steamflood project, which is now scheduled to be complete in August 1998. As part of its EOR program for the Duri field, CPI has been burning 67,000 bbl/d of crude and reinjecting the steam produced back into the field. The expanded steamflooding program includes construction of a pipeline link between the Duri field and Gulf Indonesia's 2.5-trillion cubic foot (Tcf) Corridor block gas fields in South Sumatra. The pipeline was originally scheduled to be complete in late 1997; however, the thick haze that covered Sumatra from forest fires in 1997 caused construction delays. The $590-million, 325-mile pipeline will initially carry 80 million cubic feet per day (Mmcf/d) of gas, increasing to 310 Mmcf/d by December 1998. The Corridor block gas will replace most of the 67,000 bbl/d of crude presently burned on-site for use in steam injection.

In addition to exploration contracts and EOR programs, new oil fields have come online which also will contribute to increasing Indonesia's oil production. In December 1997, Santa Fe Energy Resources (SFER) and Pertamina announced that operations had begun at the North Garagai oil field in Tanjung Jabung District, Jambi. The field contains estimated reserves of 30 million barrels of oil, and daily production from 11 wells is expected to reach between 5,000 and 10,000 barrels. The field is located in Pandan Jaya Village about 75 miles from Jambi, and oil produced from North Garagai will be shipped from Muara Sabak port to Plaju Refinery in South Sumatra. SFER also reported in January 1998, that oil production had begun at the Mudl field on its Tuban block located on Java. The initial flow rate was 3,000 bbl/d day, but is expected to jump to 20,000 bbl/d by mid-1998. For the rest of 1998, SFER plans to drill additional wells at Mudl field and exploration wells on two adjacent geological structures.

Refining
Indonesia has eight refineries with a combined capacity of 930,000 bbl/d. The largest refineries are the 285,000-bbl/d Cilacap in Central Java, 241,000-bbl/d Balikpapan in Kalimantan, and the 125,000-bbl/d Balongan, in Java. In September 1997, Mines and Energy Minister Ida Bagus Sudjana reported that Indonesia has been studying ways to increase production capacity at its oil refineries in order to avoid building expensive new refineries the country cannot afford in light of the current economic crisis. Pertamina estimates that the country's domestic demand for refined products will continue to grow at an annual rate of 6%-7% and that Indonesia will need an additional 350,000 bbl/d of capacity by the year 2000. Sudjana indicated that Indonesia is considering debottlenecking existing plants to increase production and efficiency and adding catalytic reformers to produce higher quality and lower lead petrol, and naphtha reformers to convert surplus heavy residue into lighter products.

The recent Presidential Decree No. 31/1997 has finally opened Indonesia's downstream sector to private investment. Under the new decree, private foreign and domestic companies can set up private refineries as joint ventures with Pertamina. Pertamina will remain as the sole distributor of refined products in the domestic market, but the private refineries will be allowed to sell their products to Pertamina or to international markets. The decree also indicates that Pertamina will enter into long-term contracts to buy fuel from the private refineries. In December 1997, PT Asia Pacific Petroleum Refinery Indonesia (APPRI) started construction of Indonesia's first private oil refinery in Situbondo, East Java. The $3.2 billion project is designed to produce 300,000 bbl/d of petroleum fuel including: 152,000 bbl/d of diesel oil, 20,000 bbl/d of naphtha, 64,600 bbl/d of mogas, and 72,000 bbl/d of other products. A consortium consisting of APPRI (40%) the Daelim Group (50%) and PT Kresna Tara (10%) selected Daelim Engineering Ltd. and Webster Engineering Company as the engineering, procurement, and construction contractors for the project. The refinery is currently scheduled to come on line by September 2001. Plans for two more private refineries are also being developed. PT Pusat Minyak Indonesia Timur, a joint venture between Nusamba Group (10%) and Mitsubishi Corporation (90%), may build a $1.25 billion refinery in East Lombok in West Nusa Tenggara while PT Buana Ganda Perkasa is expected to build a $3.5 billion refinery in Probolinggo, East Java. No other details regarding these additional refineries has been released.

NATURAL GAS
Indonesia has proven natural gas reserves of 72.3 Tcf. Most of the country's gas reserves are located near the Arun field in North Sumatra, around the Tunu field in East Kalimantan, in smaller fields offshore Java, the Kangean Block offshore East Java, a number of blocks in Irian Jaya, and the Natuna D-Alpha field, the largest in Southeast Asia. In 1996, Indonesia produced an estimated 2.38 Tcf of natural gas and consumed about 1.14 Tcf. Despite its significant gas reserves and its position as the world's largest exporter of liquefied natural gas (LNG), Indonesia still relies on oil to supply about 60% of its energy needs. As Indonesia's oil production has flatted in recent years, the country has tried to shift towards using its natural gas resources for power generation. However, the domestic gas market is still considered immature and the country lacks a domestic network and pipeline infrastructure to provide widespread distribution. Moreover, in November 1997, the government raised the price of commercial gas by 20% due to depreciation of the rupiah. The price of residential gas remained unchanged. Although industrial and commercial businesses account for only 4% of the total number of gas customers in Indonesia, they consume about 97% of the total gas production for the domestic market.

The Natuna D-Alpha natural gas field is located in the South China Sea, 683 miles north of Jakarta and 140 miles northeast of Natuna Island. Discovered in 1970 by Italy's Agip, the structure contains an estimated 46 Tcf of recoverable reserves. However, the gas is extremely impure, with carbon dioxide (CO2) content of approximately 71%. Due to the impure nature of the gas and the high costs of development, Agip returned its interests in the field to Pertamina. The field is currently held by a consortium led by Exxon, the operator with a 50% share, Mobil with 26%, and Pertamina with 24%.

The consortium is currently trying to market the gas, but cost estimates for exploiting the field have been placed at more than $40 billion. The project calls for construction of at least 18 offshore platforms, six for drilling, six for treating, four for injection work, and two for staff quarters. The injection work is a major reason for the high cost estimates. The CO2 will need to be separated from the gas and reinjected back into the ocean floor to avoid releasing large volumes of CO2 into the atmosphere. Another problem for the Natuna project is how to get the gas to a variety of potential markets. Although no deals have been initiated, a number of proposals have surfaced. The proposals include: a 1,226-mile pipeline from Natuna to the Arun LNG complex in north Sumatra and pipelines to Thailand, Singapore, South Sumatra, and Java. Also adding to the potential costs of developing the field is that part of the field lies within territory claimed by China, and Indonesia has been developing a defense strategy for the area with assistance from Australia.

One of the biggest obstacles facing the Natuna project operators has been finding buyers for its gas reserves. One important deal with Thailand has fallen through. On May 8, 1997, Pertamina signed a Memorandum of Understanding (MoU) with the Petroleum Authority of Thailand (PTT). The MoU provided for PTT to purchase natural gas at an initial rate of 500 Mmcf/d starting in 2003 and increasing to 1 Bcf/d beginning in 2007. The deal also had provisions for a 1,000-mile, subsea pipeline to transport the gas from the Natuna field to Thailand via Malaysian waters. In addition, PTT was to acquire a 12%-15% stake in the Natuna development project. However, PTT began to back away from the deal following the start of the Asian economic crisis. The crisis intensified in late 1997, and Thailand predicted that domestic demand for energy would be curtailed over the short term. In November 1997, Pertamina and PTT reached an agreement to delay the start of the deal from 2003 to 2007.

The Natuna development project also faces stiff competition from other gas fields within Indonesia, with much lower operating costs. A deal between Pertamina and Singapore's Sembawang Engineering and Construction Corporation is currently in negotiations. The two companies signed a letter of intent (LOI) in May 1997 for Sembawang to purchase 325 Mmcf/d of gas from the West Natuna gas fields for 22 years starting in 2000. The LOI also includes the construction of a 300-mile, underwater pipeline to move the gas from West Natuna to Singapore. The pipeline is estimated to cost between $300-$400 million, with an initial capacity of 150 Mmcf/d, eventually reaching 325 Mmcf/d. The parties are scheduled to finalize the deal sometime in March 1998.

In September 1997, Atlantic Richfield Company (Arco) announced the discovery of a new gas field in the eastern province of Irian Jaya. The discovery was made on the onshore and offshore Wiriagar and Berau blocks, and the field now bears the name Tangguh. This represents Arco's largest discovery outside the United States. Arco plans to spend up to $3 billion to develop the new reserves, which are estimated at 13 Tcf. An additional 7 Tcf of reserves are possible. The find prompted Arco and Pertamina to begin planning a multiple-train LNG plant, the first of its kind for eastern Indonesia. The new LNG plant could add to Pertamina's already dominant 50% share of LNG markets within the Asia Pacific region. Production of 6 million tons of LNG per year is scheduled to commence in 2003. Arco holds a 48% interest in the Berau block with partners Occidental Berau of Indonesia Inc. at 22.856%, Nippon Oil Exploration, 17.144% and KG Berau Petroleum, 12%. For the Wiriagar block, Arco holds an 80% interest and KG Wiriagar Petroleum Ltd. holds the remaining 20%. However, the three major markets for LNG are Japan, Korea, and Taiwan and, the ongoing Asian economic crisis could cause delays in securing production plans and sales contracts.

In other developments, Gulf Indonesia Resources Ltd., a unit of Gulf Canada Resources Ltd., completed testing of two exploration wells in the South Jambi >B= production sharing contract area in South Sumatra. The Rayun-1 natural gas well, tested in December 1997, flowed at a rate of 23.4 Mmcf/d, while the Bungin-1 well, tested in January 1998, flowed at a rate of 34 Mmcf/d. Appraisal wells are planned for the second quarter of 1998, and 3D seismic studies are scheduled for late 1998.

Pipelines
The Indonesian government has short-, medium- and long- term projects scheduled from 1996 to 2020, at a total investment of $4.4 billion, to develop and construct 6,126 miles of transmission and distribution pipelines. For the short term from 1996 to 2000, there are three major pipeline projects under consideration for Sumatra, Java, and Sulawesi, totaling $1.3 billion and 1,033 miles. The first project is a gas distribution network running from the gas field in Gresik, Musi Banyuasin, South Sumatra to the Caltex oil field in Duri, Riau and to Batam Island, Riau. The pipeline network will carry 310 Mmcf/d of natural gas from Gresik to Duri and an additional 275 Mmcf/d to Batam. Construction on the Gresik to Duri line began in early 1997 and is scheduled for completion by mid-1998.

The second short-term project is 323 miles of pipeline connecting South Sumatra to West Java. The line will connect Gresik, South Sumatra with Prabumulih, South Sumatra and Cilegon, West Java. It will deliver 250 Mmcf/d of gas. A second 174-mile pipeline will link Cilegon to an industrial complex in Subang, West Java.

The construction of a 186-mile pipeline in South Sulawesi constitutes the third short-term project. This $80 million natural gas pipeline will connect Sengkang District to Ujung Pandang. The Asian Development Bank will make a financial appraisal of the project in 1998.

The medium-term time frame runs from 2001 to 2010. Pipeline projects connecting Cirebon and Surabaya, East Kalimantan and Surabaya, and West Natuna and Central Java are under consideration during this period. LNG terminals are also planned for East Java, which will receive LNG from the Wiriagar field and West Java. Total investment for the medium-term is estimated at $990 million.

Long-term projects are being planned for 2011 to 2020. For this time period, the government is planning a pipeline to connect Arun and Natuna via Malaysian waters, East Kalimantan and Brunei, Natuna and Brunei, and Brunei and Bontang. Construction costs are estimated at $2.1 billion for about 2,000 miles of pipeline. In addition, the government is considering plans for pipelines connecting Natuna with Thailand and the Philippines.

COAL
Indonesia has proven coal reserves of 35.3 billion short tons (Bst) of which 97% is lignite and subbituminous and 3% is anthracite and bituminous. Sumatra contains roughly two-thirds of Indonesia's total coal reserves, with the balance located in Kalimantan, West Java, and Sulawesi. In 1996, Indonesia exported 40.2 Mmst, or about 76% of its coal production. The majority of these exports are destined for Japan, South Korea, Taiwan, and Hong Kong.

The current economic crisis, the El Nino induced drought, and a thick haze caused by uncontrolled forest fires has had a mixed impact on Indonesia's coal sector. The haze disrupted some mining activities in West Indonesia while the drought has made mining easier. More importantly however, mine operators have actually profited from the depreciation of the rupiah because most of their products are exported in dollars while operational costs are paid in rupiah.

In the last decade the coal industry has expanded rapidly due to rising international and domestic demand, particularly in Asia. Indonesia has become the world's third-largest exporter of thermal coal behind Australia and South Africa. Production has climbed from less than 11 Mmst in 1989 to around 53 Mmst in 1996. By 2002, production capacity is expected to reach 130 Mmst, mostly from expanding existing operations and development of new mines in south and west Sumatra and Kalimantan. Domestic demand is expected to rise to between 72 Mmst and 83 Mmst per year by 2009. In December 1997, Australia's Murchison United NL entered into an agreement with Singlurus Pratama PT for Singlurus' third generation coal exploration project at Ambor in East Kalimantan. Murchison will concentrate on a concession area known as Argosari and estimates that the area contains at least 55 Mmst of coal recoverable by open cut methods. Murchison expects to be mining by 1999, with production eventually reaching 2 Mmst per year.

ELECTRICITY GENERATION
Indonesia has electrical generating capacity estimated at 20,300 megawatts (MW), with 82% coming from thermal sources, 15% from hydro sources, and 3% from geothermal sources. Electricity production reached 66.8 terawatthours in 1996. State-owned P.T. Perusahaan Listrik Negara (PLN) projects that Indonesia's future electricity demand will grow by between 15% and 20% annually. Furthermore, PLN estimates that Indonesia will need up to 24,000 MW of new capacity by 2004 and perhaps 30,000 MW by 2010. To meet the increasing demand, PLN had signed 14 Power Purchase Agreements (PPA) with a number of private companies by July 1997. The private companies were to build 14 power plants, mostly in Java and Bali, with a total capacity of 7,701 MW. However, in September 1997, the Indonesian government put 14 power generation projects, worth $5.9 billion, on hold and nine other projects worth $4.9 billion under review due to the unfolding economic crisis. The projects put on hold included power plants in East Palembang, Cilegon, Colacap, Serang, Salak, Karaha, Cibuni, Drajat, Sibayak, Pathua 2,3,4, Dieng unit 4, and Bedugul units 3 and 4. Power plants under review included the fuel-fired plant in south Sulawesi, the Asahan hydropower plant in North Sumatra, the Geothermal Pathua Unit 1 plant in West Java, the geothermal Dieng Unit 1, 2 and 3 plant in Central Java, and the Bedugul plant in Bali.

Despite the country's economic crisis some electricity projects continue. In August 1997, Exxon Corporation and Mobil Oil Corporation announced that the companies were planning a joint venture for construction of an 8,000 MW, gas-fired power plant near Jakarta. The plant will utilize natural gas from the offshore Natuna gas field in the South China Sea. The project includes the construction to a 700-mile pipeline to transport the gas from Natuna to the plant. Operations are scheduled to begin in 2004 with an initial capacity of 4,000 MW. An additional 4,000 MW is to be added by 2006. The deal was finalized in October 1997. Another gas-powered plant is under construction at Arar Village located about 20 miles from Sorong in Irian Jaya. Australia's British Gas is building the plant, which will utilize gas reserves from sources near Arar Village and Bintuni, Manokwari District. In November 1997, scientists from two Australian universities agreed to conduct a research project, scheduled to be completed in 1998, on the social and environmental impact of the plant.

In December 1997, Hong Kong-based Hopewell Holdings signed a deal to build a new $1.6 billion power plant on Java. This coal-fired plant is set to begin operations in 2002 with a generation capacity of 1,320 MW. Of the many electricity projects Indonesia has planned, Tanjung Jati C is one of the more expensive. Hopewell has secured loans totaling $1.33 billion and will put up around $400 million, or a quarter of the total cost, to finance the project

Nuclear
Indonesia has three, small nuclear research reactors at Bandung, Jogjakarta, and Serpong on Java. However, the National Atomic Energy Agency (Batan) has been tasked with developing plans for the construction of 7-12 nuclear power plants along Java's north coast over the next 25 years. If all 12 are built, the combined capacity would be 7,000 MW. The first is the proposed $1.2-billion plant planned for construction at Mount Muria, an inactive volcano in Central Java. In January 1996, a blue-print for the plant was commissioned. Foreign consultants on the project include Atomic Energy of Canada, Westinghouse Electric, and Mitsubishi. The project was scheduled to come online sometime between 2003 and 2005. However, Research and Technology Minister Habibie announced in August 1997 that the plant would be put on hold temporarily in favor of gas-fired plants utilizing gas from the Natuna fields.

Critics of Indonesia's nuclear power program believe the country's location on a fault zone could jeopardize reactor safety in the event of an earthquake. Additionally, they point out that with the country's large potential gas, coal, hydro, and renewable potential, there is no need to build costly nuclear plants. Indonesia is already the fourth most populous country in the world, and Batan officials argue that as the country's population balloons to an estimated 270 million by 2020, demand for energy will increase significantly. The combination of these two factors, Batan officials conclude, necessitates the need to develop plans for alternative sources of power.

COUNTRY OVERVIEW
President: General Haji Mohamed Suharto
Vice-President: Bucharuddin Jusuf Habibie
Independence: Proclaimed independence on August 17, 1945. On December 27, 1949, Indonesia became legally independent from the Netherlands
Population (1997E): 201.86 million
Location/Size: Southeastern Asia/735,310 sq. mi., slightly less than three times the size of Texas
Major Cities (population in millions, 1990 census): Jakarta (8.2)(capital), Surabaya (2.5), Bandung (2.1), Medan (1.7), Semarang (1.3), Palembang (1.1), Ujung Pandang (1.0)
Languages: Bahasa Indonesia (official), English, Dutch, local dialects including Javanese
Ethnic Groups: Javanese (45%), Sundanese (14%), Madurese (7.5%), coastal Malays (7.5%), other (26%)
Religions: Muslim (87%), Protestant (6%), Roman Catholic (3%), Hindu (2%), Buddhist (1%), other (1%)
Defense (8/96): Army (235,200), Navy (43,000), Air Force (21,000), Paramilitary forces: Police (174,000), KAMRA (People's Security)(1.5 million trainees)

ECONOMIC OVERVIEW
Currency: Rupiah
Exchange Rate (3/11/98): $1 = 10,200 rupiah
Real Gross Domestic Product (1990 Dollars)(1997E): $185.4 billion
Real GDP Growth Rate (1997E): 5.0% (1998E): -5.5%
Real Per Capita GDP (1990 Dollars)(1997E): $919
Inflation Rate (1997E): 6.6% (1998E): 23.3%
Current Account Balance (1997E): -$2.2 billion
Merchandise Exports (1997E): $54.4 billion
Merchandise Imports (1997E): $42.2 billion
Merchandise Trade Balance (1997E): $12.3 billion
Major Export Products: Manufactured goods, petroleum, natural gas and related products, foodstuffs, raw materials
Major Import Products: Capital equipment, raw and intermediate materials, consumer goods, petroleum products
Major Trading Partners: Japan, United States, Singapore, Hong Kong, Britain, Australia
Petroleum and Gas Export Revenues (1997E): $12.5 billion
Petroleum and Gas Export Revenues/Total Export Revenues (1997E): 23%
Monetary Reserves (1997E, non-gold): $15.5 billion
Total External Debt (1997E): $123.1 billion

ENERGY OVERVIEW
Minister of Mining and Energy: Kuntoro Mangkusubroto
Proven Oil Reserves (1/1/98): 5.0 billion barrels
Oil Production (1997E): 1.6 million barrels per day (bbl/d), of which 1.4 million bbl/d is crude oil
Oil Production Capacity (1997E): 1.7 million bbl/d
OPEC Crude Production Quota (1H98): 1.456 million bbl/d
Oil Consumption (1996E): 845,000 bbl/d
Net Oil Exports (1996E): 755,000 bbl/d
Major Oil Customers : Japan, United States, South Korea, China, Australia, Taiwan, Singapore, Thailand
U.S. Imports of Indonesian Crude Oil (1997): 50,000 bbl/d
Crude Refining Capacity (1/1/98): 930,000 bbl/d
Natural Gas Reserves (1/1/98): 72.3 trillion cubic feet (Tcf)
Natural Gas Production (1996E): 2.38 Tcf
Natural Gas Consumption (1996E): 1.14 Tcf
Net Gas Exports (1996E): 1.24 Tcf
Major LNG Customers (1996): Japan, South Korea, Taiwan
Coal Reserves (12/31/93): 35.3 billion short tons (Bst) of recoverable reserves of which 97% is Lignite and Subbituminous and 3% is Anthracite and Bituminous
Coal Production (1996E): 53.3 million short tons (Mmst)
Coal Consumption (1996E): 13.5 Mmst
Net Coal Exports (1996E): 40.2 Mmst
Major Coal Customers: Japan, the Philippeans, Hong Kong, Thailand, Malaysia
Electricity Generation Capacity (1/1/96): 20.3 gigawatts
Electricity Production (1996E): 66.8 terawatthours

ENVIRONMENT OVERVIEW
Total Energy Consumption (1996E): 3.51 quadrillion Btu
Energy Consumption per Capita (1996E): 17.9 million Btu (vs. 351.9 million Btu in U.S.)
Energy Consumption per $1987 of GDP (1996E): 25.1 thousand Btu (vs. 16.7 thousand Btu in US)
Energy-related Carbon Emissions (1996E): 60.9 million metric tons (1.0% of world carbon emissions)
Carbon Emissions per Capita (1996E): 0.31 metric tons (vs. 5.53 metric tons in U.S.)
Carbon Emissions per $1987 of GDP (1996E): 0.44 metric tons (vs. .26 metric tons in US)
Major Environmental Issues: Rainforest degradation, water pollution, air pollution in urban areas

OIL AND GAS INDUSTRIES
Organizations: Perusahaan Pertambangan Minyak dan Gas Bumi Negara (Pertamina) - oil exploration, production, transportation, and marketing; Perum Gas Negara (PGN) -gas distributor and transmission company
Major Producing Oil Fields: Duri, Minas, Belida, Ardjuna, Arun, KG/KRA, Widuri, Nilam, Attaka
Oil Refineries (operating capacity-bbl/d, December 1997): Cilacap, Central Java (285,000); Pertamina-Balikpapan, Kalimantan (240,920); Musi, South Sumatra (109,155); EXOR-1, Balongan, Java (125,000); Dumai, Central Sumatra (114,000); Sungai Pakning, Central Sumatra (47,500); Pangakalan Brandan, North Sumatra (4,750); Cepu, Central Java (3,420)
Product Pipelines: Trans-Java (serving the Surabaya market)
Oil Tanker Terminals: Java: Cilegon, Cilacap, Surabaya, Ardjuna B (offshore) Sumatra: Pangkalan Brandan, Belawan, Dumai, Musi, Perlak, Palembang, Tanjung Uban (offshore) Kalimantan: Balikpapan Sulawesi: Ujung Pandang Irian Jaya: Sorong, Jaya Seram: Bula Natuna Sea: Ikan Pari
Foreign Oil Company Involvement: Amoseas, Arco, Caltex, Chevron, Conoco, Enterprise, Exxon, Gulf Canada, Japex, Kodeco, Maxus, Mobil, Santa Fe, Texaco, Total, Unocal
Major Gas Fields: Sumatra: Arun, Alur Siwah, Kuala Langsa, Musi, South Lho Sukon, Wampu East Kalimantan: Attaka, Badak, Bekapai, Handil, Mutiara, Nilam, Semberah, Tunu Natuna Sea: Natuna Java: Pagerungan, Terang/Sirasun Irian Jaya: Tangguh
Major Gas Pipelines: Sumatra: Pangkalan Brandan-Dumai
LNG Plants: Arun, Bontang

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Links to other sites:
1997 CIA World Factbook - Indonesia
U.S. Department of Energy's Office of Fossil Energy's International section - Vietnam
U.S. State Department's Consular Information Sheet - Indonesia
U.S. State Department's Country Commercial Guide - Indonesia
Library of Congress Country Study on Indonesia
U.S. State Department Background Notes on Indonesia - November 1997

The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.
Indonesia's Ministry of Mines and Energy
U.S. Embassy in Indonesia
Indonesian Consulate General in the United States
Indonesia's National Development Information Office

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File last modified: March 13, 1998

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Lowell Feld
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