Despite ample hydrocarbon reserves, Indonesia's oil and gas production is set to face long-term declines over the next decade. Investment interested in the Indonesian upstream sector will prove muted due to notorious regulatory issues, uncertainty surrounding ongoing review of the domestic oil and gas law and the high-cost, long-term nature of potential projects.
Falling production, slowing exploration interest and a maturing asset base - alongside rapid consumption growth - will increase Indonesia's dependency on crude oil and refined fuels imports over the coming years. The country's historical self-sufficiency in natural gas is expected to end by 2022.
Indonesian chemicals output surged 9.6% y-o-y in H117, while rubber and plastic production grew by a modest 3.2% in the context of slower than expected economic growth and capacity constraints in some sectors. Nevertheless, the performance over recent quarters puts Indonesia in a good position to expand petrochemicals capacity and downstream conversion industries. The country is aiming to becom…
The mineral ore export ban moderation that ended the prohibition on bauxite exports since January 2017 will provide significant respite to production.
The outlook is broadly positive for Indonesia's power sector, though the market continues to face significant challenges. Rising consumption demands combined with Indonesia's substantial coal and natural-gas reserves mean the country is well placed to support the rapid expansion of thermal power and numerous projects are in the pipeline. That being said, issues surrounding land appropriation, e…
With a growing population and increasing incomes, investment growth in Indonesia will depend on the country's domestic consumer and its manufacturing industries, thereby providing a stimulus to petrochemicals consumption. Additionally, we expect progress by the government in its efforts to improve the business environment. This should translate into increased investment in petrochemicals plants…
Indonesia's mineral production growth will quicken with an easing of the mineral ore export ban. Nevertheless, policy uncertainty, bureaucracy, resource nationalism and regulatory hurdles will increasingly lead to foreign miners divesting their assets and handing them over to locals as they leave.