• 20 mins Syrian Rebels Relinquish Control Of Major Gas Field
  • 1 hour Schlumberger Warns Of Moderating Investment In North America
  • 2 hours Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 hours Energy Regulators Look To Guard Grid From Cyberattacks
  • 5 hours Mexico Says OPEC Has Not Approached It For Deal Extension
  • 6 hours New Video Game Targets Oil Infrastructure
  • 8 hours Shell Restarts Bonny Light Exports
  • 9 hours Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 15 hours Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 20 hours British Utility Companies Brace For Major Reforms
  • 1 day Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 1 day Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 1 day Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 1 day OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 1 day London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 1 day Rosneft Signs $400M Deal With Kurdistan
  • 1 day Kinder Morgan Warns About Trans Mountain Delays
  • 2 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 2 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 2 days Russia, Saudis Team Up To Boost Fracking Tech
  • 2 days Conflicting News Spurs Doubt On Aramco IPO
  • 2 days Exxon Starts Production At New Refinery In Texas
  • 2 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 3 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 3 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 3 days China To Take 5% Of Rosneft’s Output In New Deal
  • 3 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 3 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 3 days VW Fails To Secure Critical Commodity For EVs
  • 3 days Enbridge Pipeline Expansion Finally Approved
  • 3 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 3 days OPEC Oil Deal Compliance Falls To 86%
  • 4 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 4 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 4 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 4 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 4 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 4 days Aramco Says No Plans To Shelve IPO
  • 7 days Trump Passes Iran Nuclear Deal Back to Congress
  • 7 days Texas Shutters More Coal-Fired Plants
Alt Text

Tesla Execs Bail As Cash Flow Hits Record Lows

Amid a rough second quarter…

Alt Text

Chinese EV Boom Could Crash Oil Prices

Most oil majors acknowledge that…

Alt Text

Richard Branson To Invest In Elon Musk’s Hyperloop One

Britain’s Virgin Group boss has…

John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

More Info

By Embracing Renewable Energy Indonesia Avoids Offshore Disputes

By Embracing Renewable Energy Indonesia Avoids Offshore Disputes

Indonesia, formerly a net oil exporter in the Organization of the Petroleum Exporting Countries, is shifting its energy production from serving primarily export markets to meet the needs of its growing domestic market.

Indonesia is the most populous country in Southeast Asia and the fourth most populous country in the world, behind China, India, and the United States. Indonesia is now the world's third most populous democracy with over 250 million inhabitants, the world's largest archipelagic state (17,508 islands, 6,000 inhabited) and the world's largest Muslim-majority nation.

Indonesia’s economy grew more than 6% annually in 2010-12, but the government faces ongoing challenges of improving country’s insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of high oil prices. 

Related Article: China’s Oil Discoveries - 1.08 Billion Tons

The energy sector continues to influence Indonesia’s economy. According to the U.S. government’s Energy Information Administration, oil and gas alone constituted 20 percent of Indonesian exports in 2012, accounting for 24 percent of total state revenues.

Indonesia suspended its membership in OPEC in 2009 because of growing domestic demand, declining production from mature fields and limited investment to increase capacity. The country straddles the Strait of Malacca,

Intrepid foreign energy firms seeking to enter the Indonesian market face a number of natural hazards, which include occasional floods, severe droughts, tsunamis, earthquakes, volcanoes and forest fires.

While Indonesia’s offshore waters are enticing for foreign investment here too the obstacles are not insubstantial. Indonesia’s vast archipelago offers rich opportunities to exploiting their Exclusive Economic Zones (EEZs), which the 1982 United Nations Convention on the Law of the Sea (UNCLOS) recognized 12 nautical miles as normal for territorial seas and waters and provided international recognition of 200 mile EEZs.

Here too, though, politics intervene. Indonesia has a stated foreign policy objective of establishing stable fixed land and maritime boundaries with all of its neighbors, but this has yet to be fully realized. Three stretches of land borders with Timor-Leste have yet to be delimited, two of which are in the Oecussi exclave area, and no maritime or EEZ boundaries have been established between the countries. Indonesian groups challenge Australia's claim to Ashmore Reef, while Australia has closed parts of the Ashmore and Cartier Reserve to Indonesian traditional fishing and placed restrictions on certain catches. Indonesia is continuing land and maritime negotiations with Malaysia, as unresolved issues include the Tanjung Datu and Camar Wulan border area in Borneo and the maritime boundary in the Ambalat oil block in the Celebes Sea. Indonesia and Singapore continue to work to implement their 1973 maritime boundary agreement by delineating unresolved areas north of Indonesia's Batam Island, while maritime delimitation talks continue with Palau. Last but not least, in the South China Sea bilateral EEZ negotiations with Vietnam continue. 

Related Article: Japan Hints at Nuclear Safety Resolution

Overshadowing all these however, is the fact that China is claiming part of Indonesia’s Natuna islands in its Riau Islands province as its own territory. In early March TNI chief Gen. Moeldoko flew to China to attend a meeting with his Chinese counterpart to affirm Indonesia’s commitment to stabilizing the volatile South China Sea region, telling reporters upon his return area. Returning from his trip, Moeldoko said he had plans to further strengthen Indonesia’s presence in the Natuna islands because of their strategic location, remarking, “We have to continue monitoring the developments in the South China Sea cautiously.”

The good news for fans of renewable energy is that Indonesia is planning increasing its share of renewable power. In 2013 hydroelectricity accounted for 8.78 percent of Indonesia’s installed capacity of 46,428 megawatts. Now Indonesia’s government plans to build hydroelectric plants at 239 dams owned by the Public Works Ministry as part of its renewable energy initiative.

While Indonesia is shifting its energy priorities to satisfying domestic demand, offshore hydrocarbon production entails international political risks that renewable energy production does not, a not insignificant issue for Indonesian bureaucrats laboring to craft a new 21st century energy policy for the nation.

By John Daly of Oilprice.com




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News