INDONESIA—GROWTH OF THE OIL INDUSTRY DURING 1970

Abstract

The growth of the oil industry in Indonesia during 1970 was the result of Pertamina's policy of encouraging foreign oil companies to invest in the country. By the end of the year production-sharing contracts had been signed with more than 35 groups of companies.

The stabilisation of the political climate under the new government enabled exploration to start up again during 1967 and the next two years saw a rapid growth in geological activity. This has led to the drilling of over sixty exploration wells during the past year, and expenditure on exploration is now in excess of $U.S. 150 million per annum. A large part of the exploration effort is directed to offshore acreage and has been rewarded with discoveries by Sinclair in 1969, followed in 1970 by IIAPCO, Union Oil and Cities Service. These finds are expected to lead to production in 1971. Production in 1970 was in excess of 900,000 BOPD, compared with 600,000 BOPD in 1966. Existing refineries are being rehabilitated, a new plant at Dumai is planned to come on stream in July, 1971, and a further refinery is proposed for Java. A polypropylene plant is being built at Pladju, South Sumatra.

As the campaign against pollution intensifies, other countries, particularly Japan, are hopeful of further significant finds of the good quality, low sulphur crude oil known to exist in Indonesia.