Already hit by the financial crisis, the Indonesian government is preparing for another rough ride in 2009 as it lowers revenue expectations for earnings from the energy and mining sectors.
This is partly due to a projected 2009 slump in the global prices of oil and gas commodities. Oil and gas companies had contributed most to the energy sector's total revenue.
Besides price slump, listed oil and gas company PT Medco Energi Internasional owned by tycoon Arifin Panigoro, is afraid of lower output giving the aging fields of its energy assets which are unable to produce optimal output in Indonesia.
The company hopes that its sagging oil and gas output can be offset by seven key projects which are targeted for completion by 2011.
But results can be seen by 2009.
These new projects including a bioethanol plant in Lampung with the first output shipment due in January 2009.
Others include the development of gas facilities in the Lematang block in South Sumatra to be completed in June 2009.
Other remaining projects for completion in 2011/2012 include Block A gas field in Aceh, the enhanced oil recovery project in Block Rimau in South Sumatra, Area 47 in Libya, the Senoro gas field in Central Sulawesi, and a power project in Sarulla, North Sumatra.
Even with these ongoing projects, the company is not resting on its laurels and would continue to survey for overseas oil and gas fields despite the fact that the success rate for confirming feasible reserves in Indonesia remains very low at between 10 percent and 15 percent.
It is likely that the global financial crisis would hurt rupiah financing for the company’s future plans.
Jakarta Post, "Oil rises to above $44 before OPEC meetingOil falls below $40 despite OPEC output cut »Medco predicts 2009 output down on aging oil and gas fields" dated 18 Dec 2008 in the ASEAN website [downloaded on 16 Feb 2009], available at http://aseanenergy.org/news/?p=1121.
Xinhua, "Indonesia lowers revenue expectation from oil, gas, mining in 2009" dated 31 December 2008 in the People's Daily website [downloaded on 16 Feb 2009], available at http://english.people.com.cn/90001/90777/90851/6565460.html