Energy

After years of treading water, Indonesia’s energy sector is finding new optimism in the fresh faces being appointed to key government positions by the new president, Joko Widodo, with the hope that they will be able to renew investor interest in the industry and spur a wave of development. The changes at the top come at a critical time, as myriad factors continue to buffet the sector in Indonesia, which ranked among the world’s top-five liquid natural gas (LNG) exporters in 2013 and remains Asia’s second-largest natural gas producer despite continuing production declines. After years of halting progress in the power sector, the new energy strategy has the potential to add much-needed capacity to the domestic market, provided that policymakers can avoid some of the pitfalls that have affected similar rapid development programmes in the past. A concentration on building coal-fired power plants, designed to run on inexpensive, domestically produced coal, should help smooth out the process. In the meantime, the strategy’s emphasis on boosting efficiency and reducing Indonesia’s high energy intensity levels should also help to rein in the country’s domestic consumption.

This chapter contains an interview with Dwi Soetjipto, President-Director, Pertamina; and an Energy roundtable with Lukman Mahfoedz, President-Director and CEO, PT Medco Energi Internasional; Roberto Lorato, President, Premier Oil Indonesia; Craig Stewart, President, Indonesian Petroleum Association and President, Salamander Energy; and Hardy Pramono, President-Director, Total E&P Indonesia.