Oil and Gas Equipment

Indonesia 

Overview                                                                                    

 

USD Millions               2004            2005            2006 (estimated)

Total Market Size           495.5          525.5            598.3

Total Local Production    145.0          150.0            150.0

Total Exports                 100.0            110.0            110.0

Total Imports                 450.5            485.5            558.3

Imports from the U.S.    121.2            132.5            145.7

Note: The above statistics are unofficial estimates.

 

The market for oil and gas equipment in Indonesia remains attractive and has a promising long-term outlook. In 2004, the GOI signed 19 production-sharing contracts (PSCs) with a total investment of $5.6 billion.  In 2005, the GOI signed 16 PSCs and the investment reached $6.8 billion.  In 2006, the investment in this sector was estimated to increase to $7.7 billion.  In 2006, the GOI awarded 23 new contracts worth  $235.8 million. The GOI is expected to award new contracts for exploration in more than 40 blocks in 2007.  

The country’s production was 1.01 million barrels per day (bpd) in output of crude and condensate this year, slightly lower than the target of 1.05 million bpd.  In 2007, it is estimated that production would reach 1.02 million bpd. Most of this production (88%) came from mature fields, which are continuing to decline.  In order to find new oil and gas areas and replace aging fields, Indonesia plans to drill 200 exploration wells by 2009.  It is estimated that these activities would discover 3.8 billion barrels in oil reserves and 17 trillion cubic feet in gas reserves.

Indonesia imported $450.5 million worth of oil and gas equipment in 2004.  In 2005, the total import value of oil and gas equipment increased to $485.5 million.  Imported US products represented 27 percent of the total import value. The actual import value of US products could be higher than reported, because many U.S. products are imported to Indonesia through Singapore. Industry sources estimate that the market will increase by 15 percent, with U.S. market share increasing by 10 percent in 2006 with expanding exploration and enhancement of existing oil fields.

 

Best Prospects/Services                                                              

 

U.S. companies are strong suppliers of parts for boring/sinking machinery, drill pipes used in drilling for oil and gas, pumps, compressor/pump parts, and floating or submersible drilling production platforms.

Based on market observations and discussions with agents and distributors, drilling and production equipment has the most potential.  With a total value of more than 60 percent of the total expenditure, this category includes drilling, machinery, mud equipment and accessories; production surface equipment; drilling tools & retrievable production tools; casing, tubing and accessories; cementing equipment and liner hanger systems, fishing and repair tools (drilling); drilling and mud control instruments; production well test and monitoring instruments; wellhead equipment and accessories; production string components and subsurface pumps; derricks & accessories and geological & geophysical operating equipment.

Opportunities                                                                           

 

Proposed Natural Gas Infrastructure Projects

 

·           Duri – Dumai – Medan Pipeline : $547 million

·           East Kalimantan – East Java Pipeline: $1,900 million

·           South Sumatra – West Java Phase I Pipeline: $448.4 million

·           South Sumatra – West Java Phase II Pipeline: $776.1 million

 

Proposed Oil Infrastructure Projects:

 

·           Transit Terminal Bau-Bau, Sulawesi: $15.1 million

·           Main Transit Terminal Tuban and Pipeline Tuban – Surabaya: $81.5 million

·           West Java LPG Terminal: $37 million

·            Balongan – Cikampek – Jakarta Pipeline: $40 million

·            Balongan – Tegal – Semarang Pipeline including Tegal and Semarang Depo: $65 million

·            Upgrading of Tanjung Uban and Sambu Island Installation:$66.6 million

·            Upgrading of Lube Oil Bleeding Plant (LOBP) Jakarta:$18.4 million

                                                      

Construction of additional gas transmission pipelines in Indonesia should bring significant commercial opportunities for US companies that supply engineering services and equipment such as compressors, metering systems, and pumps.

 

Resources                           

 

P.T. Perusahaan Gas Negara (PT PGN), website: www.pgn.co.id

PT Pertamina, website: www.pertamina.co.id

Ministry of Energy and Mineral Resources, website: www.esdm.go.id

BP Migas, website: www.bpmigas.com