OIL AND GAS POLICY AND REGULATION

SECRETARIAT GENERAL OF NATIONAL ENERGY COUNCIL

OIL AND GAS POLICY AND REGULATION

1


ROLE OF OIL AND GAS INDUSTRIESROLE OF OIL AND GAS INDUSTRIES

2

NATIONAL SUSTAINABLE DEVELOPMENT

OIL AND GAS INDUSTRYOIL AND GAS INDUSTRY

HIGH HIGH

TECH.TECH.

HIGH HIGH

CAPITALCAPITAL

HIGH HIGH

RISKRISK


NATIONAL OIL AND GASNATIONAL OIL AND GASREGULATORY FRAMEWORKREGULATORY FRAMEWORK

3

LAW NO. 22/2001CONCERNING OIL AND GAS(PARADIGM)(PARADIGM)

OIL AND GAS POLICY((POLITICAL PLATFORMPOLITICAL PLATFORM))

UPSTREAM BUSINESS REGULATION

OIL AND GAS REGULATION

DOWNSTREAM BUSINESS REGULATION

OIL AND GAS INDUSTRY TECHNOLOGY REGULATION

SUPPORTING BUSINESS REGULATION

Objective: Efficient and liable

oil and gas management

Objective: Efficient and liable

oil and gas management

Objective: The assurance of oil

and gas fuel supply in efficient and adequate amount

Objective: The assurance of oil

and gas fuel supply in efficient and adequate amount

Objective: Competent oil and gas

supporting business

Objective: Competent oil and gas

supporting business

Objective: Reliable, Safe, and

environmentally friendly oil and gas installation

Objective: Reliable, Safe, and

environmentally friendly oil and gas installation


FUEL POLICYFUEL POLICY

4

FUELS FUELS

POLICYPOLICY

SECURITY OF SUPPLYSECURITY OF SUPPLY

FUEL CLASSIFICATIONFUEL CLASSIFICATION

PRICING POLICYPRICING POLICY

FUEL DIVERSIFICATIONFUEL DIVERSIFICATION

FUEL SPECIFICATIONFUEL SPECIFICATION

FUEL CONSERVATIONFUEL CONSERVATION


TARGET OF ENERGY MIXTARGET OF ENERGY MIX(Presidential Regulation No. 5 of 2006)(Presidential Regulation No. 5 of 2006)

5

Gas 28.57%

Coal15.34%

Oil51.66%

Geothermal 1.32%

Hydro Power 3.11%

Primary Energy Mix 2006

Gas 30%

Energy Mix 2025

Energy Elasticity < 1Energy Elasticity < 1Energy Elasticity = 1,8Energy Elasticity = 1,8

Coal 33%

Oil 20%

NRE,17%

Biofuel 5%

Geothermal 5%

Biomass, Nuclear, Hydro Power, Solar, Wind Power 5%

Liquefaction Coal 2%

NON FOSSIL ENERGY < 5% NON FOSSIL ENERGYNew & Renewable Energy Minimum 17 %


NATIONAL FUEL SUPPLY

6


FOSSIL ENERGY RESOURCES RESERVES PRODUCTION

RSV/PROD RATIO

(YEARS)*)

Oil 56,6 billion barrel 8,4 billion barrel**)

348 million barrel 24

Gas 334,5 TSCF 165 TSCF 2,7 TSCF 61

Coal 93,4 billion ton 18,7 billion ton 250 million ton 75

Coal Bed Methane (CBM) 453 TSCF - - -

*) Assumed: no new reserves found**) Including Cepu Block

NON-FOSSIL ENERGY RESOURCES INSTALLED CAPACITY

Hydro 75.670 MW (e.q. 845 million BOE) 4.200 MW

Geothermal 27.000 MW (e.q. 219 million BOE) 1.052 MW

Mini/Micro Hydro 450 MW 84 MW

Biomass 49.810 MW 300 MW

Solar 4,80 kWh/m2/day 8 MW

Wind 9.290 MW 0,5 MW

Uranium 3.000 MW (e.q. 24,112 ton) for 11 year*) 30 MW

*) Only at Kalan – West Kalimantan

INDONESIA ENERGY RESERVES AND PRODUCTION (2008)

7Source : Directorate General of Oil and Gas, 2009


8

NATIONAL FUEL SUPPLY SYSTEM

S = SeparatorP = Pipe

Process C

CBM

REFINING TRANSPORTATION

GAS

FUEL IMPORT

CRUDE IMPORT

ALTERNATIVE SOURCES

GAS EXPORT

C

C

OIL

STORAGE TRADING USAGEEXPLOITATION

CRUDE EXPORT

LPG IMPORT

R = RefineryT = Tank

R

R

R

T

T Max 10%

S

S

S

S

S

StSt

St

St

StC = ConsumersSt = StationCBM = Coal Bed Methane

P

P

P

S

GAS PIPE

CNG

RGRT C

C

C

C

LNG

LPG

RT = Receiving TerminalRG = Regasification


9

OIL REFINERIES IN INDONESIA

PT. PERTAMINA (Persero)

UP II DumaiCAPACITY : 127 MBCD

SOUTH CHINA SEA

PACIFIC OCEAN


UP II Sungai PakningCAPACITY : 50 MBCD


UP III Plaju CAPACITY : 127 MBCD


UP IV Cilacap CAPACITY : 348 MBCD


UP V Balikpapan CAPACITY : 260 MBCD


UP VI BalonganCAPACITY : 125 MBCD


UP VII KasimCAPACITY : 10 MBCD

PUSDIKLAT MIGAS

CepuCAPACITY : 3,8 MBCD

PT. TRANS PACIFIC PETROCHEMICAL INDOTAMA

TubanCAPACITY : 100 MBCD

PT. PATRA SK

DUMAICAPACITY : 25 MBCD

OIL REFINERY

(TOTAL CAPACITY: 1.176 MBCD)

Source : Directorate General of Oil and Gas, 2009


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FUEL STORAGE FACILITIES

Kalbar

7,000 KLRiau dan Kep Riau

101,580 KL

North Sumatera

32,815 KL

East Java

55,649 KL

NAD

228,861 KL

Jakarta dan Banten

206,809 KL

UPMS I

848,214 KL

UPMS II

205,509 KL

UPMS III

1,235,850 KL UPMS IV

467,470 KL UPMS V

660,575 KL

UPMS VI

236,368 KL

UPMS VII

224,140 KL

UPMS VIII

282,544 KL

Total Owned by PT Pertamina (Persero) : 4.16 millin KL

Total Owned by Private Companies : 642 thousand KL

Central Java

3,100 KL

Kalsel

2,517 KL

Kaltim

3,720 KL



FUEL SUPPLY DEMAND

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Notes:- Supply = Production + Import - Tri Wahana Universal Refinery (6,000 barrel/day) and Muba Refinery ( 800 barrel/day) start to operate in 2009.- Banten Refinery (150,000 barrel/day) start to operate in 2014 (Based on Pertamina’s Project Plan)



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FUEL SUPPLY – DEMAND 2008



FUEL SUPPLY SECURITYFUEL SUPPLY SECURITY

13


FUEL SUPPLY SECURITYFUEL SUPPLY SECURITY

14

EFFORTSEFFORTS

OPTIMIZING THE UTILIZATION OPTIMIZING THE UTILIZATION OF DOMESTIC REFINERIES OF DOMESTIC REFINERIES

NEW REFINERY DEVELOPMENTNEW REFINERY DEVELOPMENT

ENCOURAGING ALTERNATIVE FUELSENCOURAGING ALTERNATIVE FUELS

REVAMPING EXISTING REFINERIES REVAMPING EXISTING REFINERIES


INDONESIA FUEL STOCK

• ALONG WITH THE ISSUE OF OIL & GAS LAW NO.22 YEAR 2001, AND GOVERNMENT REGULATION NO. 36 YEAR 2005, DOWNSTREAM ACTIVITIES STARTED GROWING INCLUDING BUSINESS OPPORTUNITIES FOR FUEL STORAGE.

• CURRENTLY INDONESIA HAS MERELY THE FUEL STOCK.• INDONESIA HAS A 23-DAYS-FUEL STOCK IN REFINERIES, SHIPS,

AND COMMERCE

15


16

FUEL DIVERSIVICATION


17

0%

20%

40%

60%

80%

100%

LPG (kL eq. to kerosene) 163,182 2,069,536 4,000,000 7,900,000

Kerosene (kL) 9,851,812 7,832,280 5,804,911 2,000,000

2007 2008 2009 2010

Note:

In 2010, subsidized kerosene remained in the market used only for household in remote area, small business and house lighting.

ProgramCompletion

SUBSTITUTION OF KEROSENE TO LPG FOR HOUSEHOLD AND MICRO BUSINESS

1,63%

98,37%

20,90%

79,10%

40,80%

59,20%

80,57%

20,40%



B I O F U E L

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Bioethanol

B I

O F

U E

L

Gasoline SubstituteGasoline Substitute

BiodieselGasoil

SubstituteGasoil

Substitute

Bio-oil/Pure Plantation Oil Fuel Oil Substitute Fuel Oil

Substitute

Kerosene SubstituteKerosene Substitute


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CONCLUSIONS


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C O N C L U S I O N SC O N C L U S I O N S

1. DOMESTIC FUEL CONSUMPTION CONTINUALLY INCREASES WHILE FUEL PRODUCTION IS RELATIVELY CONSTANT. CONSEQUENTLY, TOTAL IMPORTED FUEL IS ESTIMATED TO BE CONTINUALLY INCREASING. DEVELOPMENT AND EXPANSION OF THE EXISTING OIL REFINERIES AS WELL AS CONSTRUCTION OF NEW REFINERIES WOULD BE USEFUL TO REDUCE DOMESTIC DEPENDENCY ON IMPORTED FUEL.

2. ENERGY DIVERSIFICATION PROGRAM IS IMPLEMENTED IN ORDER TO CONSERVE THE LIMITED FOSSIL FUEL SOURCE. NATURAL GAS, BIOFUEL AND COAL UTILIZATIONS ARE MAIN ISSUES IN THE SUBSTITUTION OF CONVENTIONAL FUELS (GASOLINE AND GASOIL).

3. DOWNSTREAM BUSINESS ACTIVITIES, ESPECIALLY OIL AND NATURAL GAS STORAGE BUSINESS IN INDONESIA IS GROWING AND OPEN TO PRIVATE SECTOR.

1. DOMESTIC FUEL CONSUMPTION CONTINUALLY INCREASES WHILE FUEL PRODUCTION IS RELATIVELY CONSTANT. CONSEQUENTLY, TOTAL IMPORTED FUEL IS ESTIMATED TO BE CONTINUALLY INCREASING. DEVELOPMENT AND EXPANSION OF THE EXISTING OIL REFINERIES AS WELL AS CONSTRUCTION OF NEW REFINERIES WOULD BE USEFUL TO REDUCE DOMESTIC DEPENDENCY ON IMPORTED FUEL.

2. ENERGY DIVERSIFICATION PROGRAM IS IMPLEMENTED IN ORDER TO CONSERVE THE LIMITED FOSSIL FUEL SOURCE. NATURAL GAS, BIOFUEL AND COAL UTILIZATIONS ARE MAIN ISSUES IN THE SUBSTITUTION OF CONVENTIONAL FUELS (GASOLINE AND GASOIL).

3. DOWNSTREAM BUSINESS ACTIVITIES, ESPECIALLY OIL AND NATURAL GAS STORAGE BUSINESS IN INDONESIA IS GROWING AND OPEN TO PRIVATE SECTOR.


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OIL AND GAS POLICY AND REGULATION

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