Institut Teknologi Bandung

This year, Indonesia still depands on fossil fuel as the main energy source. However, Indonesia is being faced with the fact that oil energy production is decreasing to 950.000 BOPD, while the demand keep increasing. To substitute the national deficit, Indonesia import 600.000 BPD.

Widjajono pointed that it is not an efficient policy to be implemented in Indonesia. Widjajono said that Indonesia is not an oil-rich country such as Middle East countries. "Indonesia's coundition to import oil from abroad means that we are not a rich country." said ITB Economics and Oil and Gas Management Professor.

Accumulatively, oil is a relatively more expensive fuel rather than other energy sources such as gas, geothermal, and coal. Therefore, it is not rational if Indonesia is not a rich country but use expensive items. "Indonesia people are acting like reach people. If we are poor people, then we still have to struggle for life," said ITB Petroleum Engineering alumni.

As a comparison, electricity that generated from oil creates 3 kwh electricity/litre. With the price Rp6000/litre so the price per kwh become Rp 2000 (around 22 US sdn). If it is with generator price, the total would be 25 US sen/kwh. Otherwise, according to the government policy, geothermal is around 9.7 sen dollar per kwh, while gas is only 10 sen / kwh. "While there are still gases and geothermal that hasn't been used optimally, we use a more expensive fossil fuel,"

Investment, Diversification, and Conservation

According to Widjajono, there are three things about Indonesia energy that should be managed, which are investment, diversification, and conservation. Today, Indonesia implement fixed fiscal system which is not flexible. It create huge impact on the decreasing of Indonesia fuel reseve. "The reserve and production of Malaysia, Australia, keep increasing because thouse countries has both big revenue and income. Therefore, investors prefer to go to those countries.

Potential Indonesia reserve hasn't been said to be provable reserve. To become provable reserve, potential reserve should be managed first, and the management needs good investment climate.  Indonesia hasn't had good investment climate, such as land acquisition, permission, and decentralization.

The second point is diversification, which are create a diversificiation of other fuel such as gas and geothermal.  Government policies should be accommodate energy diversification such as increase the price of gas properly. Previous Indonesia mistake is that always ask for relatively cheap price of gas around 3 dollar per MMBTU. Therefore, the producers sell it abroad because it wouldn't make profit if it is sold inside the country.

About Widadjono Partowidagdo

Widjajojo Partowidagdo was born in Magelang, 60 years ago. A man whose hobby is mountaineering is a ITB Physics Engineering alumni, the same year with Purnomo Yusgiantoro. Widjajono has comprehensive experience in petroleum industry. He was registered in P3M Team Member (Oil and Gas Production Improvement Supervising), Energy and Mineral Resources Department (ESDM), Advisor of Oil and Gas Production Association, and National Oil and Gas Caucus Petroleum Engineering Indoensia Association (IATMI).

Up to now, Widjojono has created two books which are Understanding Development and Policy Analysis (2004) and Oil and Gas Economics Management (2002).