The financial crisis of the late 1990s dealt a body blow to Indonesia’s economy, but ten years later both long-time observers and champions of the underperforming country are again optimistic.
Strategically positioned between Australia to the south and China and East Asia to the north, the country’s geographic location affords multiple opportunities to access favorable markets in both directions. Sizeable proven oil and gas reserves and a robust labor force coupled with greater political stability and legal certainty than in the past add to Indonesia’s potential to sustain higher levels of growth.
However the good news is followed by hard challenges ahead. The absent of the discovery of new reserves and also aging machinery and equipment make the country must prepare for the loss of revenue from the oil and gas sector. It’s predicted that Indonesia’s oil reserves could be depleted within 10 to 20 years and its natural gas reserves within 30. In order to prevent this disaster, exploration and refining of Indonesia’s trade policies are very much needed.
About Indonesia Oil and Gas
Since independence in 1949, revenues generated from natural resource extraction—particularly oil and gas—have formed the economic backbone of development. Through the early 1980s, over half of total government revenues came from the sector, and it still accounted for 40 percent of spending in 1990 and 24 percent in 2005.
Nowadays, Indonesia holds proven oil reserves of 4.3 billion barrels and ranks twentieth among the world’s oil producers. It also holds about 110 trillion cubic feet natural gas which ranks top in the Asia pacific region. Over the past few years, Indonesia has been facing challenges in further increasing its oil and gas output, mainly due to the maturation of its existing fields and aging machinery and equipment.
To capitalize on the country’s abundant oil and gas reserves and to meet the growing world and domestic energy consumption demand, the... [continues]
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(2011, 06). Trade Policies of Oil and Gas in Indonesia. StudyMode.com. Retrieved 06, 2011, from http://www.studymode.com/essays/Trade-Policies-Of-Oil-And-Gas-728692.html
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