Indonesia’s oil and gas industry is a vital part of the economy, contributing approximately 5 per cent. of total state income tax revenues in 2015 and the country remains the world’s eighth largest exporter of natural gas, in the form of Liquefied Natural Gas.


Indonesia’s Oil and Gas Industry



By 2020…

  • Domestic gas demand to grow ten-fold
  • International gas market worth up to US$10 billion

By 2030…

  • The world’s seventh largest economy
  • 135 million consumers
  • Upstream energy market generating a turnover of US$270 billion
  • 47% of primary energy demand met by oil and gas

(Source: McKinsey, 2012)

Sumatra is the engine room of the Indonesian oil and gas industry, with approximately 50% of the country’s oil and gas opportunities and in excess of 70 oil companies operating in the region, including the national oil company, Pertamina, and super-majors ConocoPhillips, CNOOC, Petrochina, Chevron, and Exxon Mobil.

Despite this, government fuel subsidies, along with a drop in local production, devaluation of the country’s currency, and the declining oil price have placed an ever-growing burden on the country’s budget. This has created increasing pressure on the government to streamline processes and approvals and encourage increases in upstream oil and gas investment, representing a significant opportunity to technically capable companies such as Andalas.

With a population of over 250 million, vast areas of the country facing critical energy shortages and demand set to increase by over 30% by 2020, Indonesia presents an attractive opportunity. In 2013 PWC described the Indonesian power sector as “potentially the most exciting power investment opportunities for at least a generation”.

About Indonesia

The Republic of Indonesia is an archipelago comprising approximately 17,508 islands covering some 1.9 million km2, located in Southeast Asia and Oceania. It comprises 34 provinces and shares land borders with Papua New Guinea, East Timor, and Malaysia. Other neighbouring countries include Australia, Singapore, Philippines, Palau, and the Indian territory of the Andaman and Nicobar Islands. The capital city is Jakarta, located on the western end of the island of Java.

Indonesia is a democratic republic with an elected legislature and president and is a founding member of ASEAN. The country is a polyglot nation with an estimated population of over 256 million people in 2015 and is the world’s fifth most populous country (behind the likes of China, India, and the United States). It is the most populated country in Southeast Asia and the world’s most populous Muslim nation.

Indonesia is a member of the G-20 group of major economies and ranked as the world’s 16th largest economy with an estimated nominal GDP of over US$888 billion. It has seen a resurgence since the Asian financial crisis in 1997, averaging GDP growth of 5.5 per cent. per annum from 2011 to 2015. The country is now seen as an emerging and vibrant democracy, with a growing economy, and as a serious contributor on the regional and international stage.