Indonesia's oil deficit doubled to US$7.3 billion

While Indonesia booked 19.53% growth in export market last year with record high US$85.5 billion and surplus of US$28 billion, the country's oil deficit doubled to an alarming level.

According to the data from Central Bureau of Statistic (BPS), Indonesia booked deficit of US$7.3 billion last year, almost doubled from US$3.83 billion in 2004.

Indonesia export US$8.15 billion worth of crude oil with import at US$6.79 billion, resulting a surplus in crude oil trading at US$1.36 billion. The country, meanwhile, imported refined products at US$10.58 billion and exported only US$1.92 billion.

This is a double trouble. Indonesia's crude oil output has been staggered at slightly below 1 million barrel per day, dropped from its highest at 1.5 million prior to 1997 financial crisis. Lack of new investments and legal uncertainties combined with old-and-mature producing wells makes the country unlikely to boost its output significantly in short-term. Government planned to boost oil production to 1.3 million barrel by 2008, but analysts believed 2009 would be the fastest.

Cepu Project was initially scheduled to come on stream by 2008 following the signing of the contract in September 2005. But the endless conflict on operatorship between Pertamina and ExxonMobil would delay further the Cepu commercial operation by at least six months to 2009.

The starting up of Tuban Petrochemical Center next month might ease little bit the import pressure on diesel and kerosene, but that's not the case with gasoline. Sinopec's plan to build new refinery in Tuban, East Java in cooperation with Pertamina is still at feasibility study. That would take at least three more years.

In contrast with government claim that oil import reduced since November, import of both crude and refined oil in December 2005 increased by 8%. It means pressure on Indonesian rupiah from an increasing oil deficit remains for few more years.

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