Exploration and Exploitation of Oil in Mature Basins, Indonesia
Indonesia has been very successful in fully exploiting its oil and gas resources under the Production Sharing Contract (PSC) system within the last century. Currently, the Indonesian oil industry in mature basins is facing profound changes due to increasing domestic demand, major western investors moving out, and a steady decline in production coupled with lower exploration investment levels. The governments in many other countries are also facing these same challenges. To meet these challenges, this paper focuses on: 1) the strategy to maintain oil production, 2) strategic options which could be adopted by Government of Indonesia (GOI), 3) the strategy which should be adopted by the GOI.nnBy using analytical tools like SWOT, Executive Scorecard, and by analogy with experience and lessons learned from other major oil producing countries, the key success factors, distinctive competences, major barriers to success and a dynamic model of the Indonesian oil industry are determined. Subsequently, three strategic options, that are operator-dominated, National Oil Company (NOC)-enhancing and mixed market-enhancing strategies, are defined. After this, an integrated strategic plan for the Indonesian oil industry which includes short, medium and long term initiatives is developed.
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