Indonesia to gradually cut oil, gas exports

The Indonesian government plans to gradually scale down shipment of oil and gas to overseas to comply with rising domestic demand, official said here on Thursday.

Lacking of processing facilities leads Indonesia export some of its crude oil and import oil to meet with domestic demand.

Reducing importation and processing more crude oil at domestic would be more efficient, said I.G.N. Wiratmadja, director general of oil and gas at energy and mines ministry.

The ministry plans to reduce oil export from 38 percent to 15 percent in the next ten years, and for a long term, it will be cut gradually to zero, according to him.

"Reduction of export will trim transport cost. We will (totally) process crude oil at domestic," he said at energy and mines ministry.

Indonesia only has six oil refineries and they are not sufficient for the country, said Wiratmadja.

Going forwards, he said that the country plans to build two oil refineries to add the processing capacity.

On gas, Indonesia exports 41 percent of its production and will gradually reduce the shipment to overseas to zero in 2040, according Wiratmadja.

Last year, Indonesia's oil lifting (after sold) reached 794,000 barrel per day.

Indonesia has proven oil reserve of 3.7 billion barrels and its production keeps dwindling due to aging wells that led the country to be a net-oil importer and exited from OPEC membership in 2008, but now the national will return to its membership.

The government has decided to shift the reliance on fossil fuel to gas, whose reserve abundance, and nuclear energy to comply with rising energy demand.

Indonesia, one of the world's top five LNG importers, chalks up huge array of 104 trillion cubic natural gas reserve, according to data from the country's upstream regulator, SKK Migas.

The government will kick off construction of nuclear power plant that is set to generate power in 2024 or 2025, in an effort to get energy efficiently.