MINISTRY OF ENERGY AND MINERAL RESOURCESREPUBLIC OF INDONESIA

INTERNATIONAL FUEL AND LUBES CONFERENCE AND EXHIBITION 2007Jakarta, November 20th 2007

FUEL AND LUBRICANTS INDUSTRY FUEL AND LUBRICANTS INDUSTRY POLICY IN INDONESIA:POLICY IN INDONESIA:

TOWARDS BETTER AND CLEANER ENVIRONMENTTOWARDS BETTER AND CLEANER ENVIRONMENT

Purnomo YusgiantoroMinister of Energy and Mineral Resources

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-

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

2002

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Juta

SBM

Without conservation scenario With conservation scenario

PRIMARY ENERGY UTILIZATION PROJECTION

Growth avarage 2002-2025:- Without conservation = 8,4%- With conservation = 5,6%

Source: National Energy Management Blue Print

Mill

ion

BO

E

Without conservation

With conservation

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BASIC CONCEPT OF LAW No. 30/2007 ON ENERGY

Shifting Paradigm :SSM DSM

Foundation for energy policy

Security of Energy SupplyBA

SIC

CO

NC

EPT

ENERGY DIVERSIFICATION

ENERGY CONSERVATION

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Natural Gas, 28.57%

Coal, 15.34%

Oil51.66%

Geothermal, 1.32%

Hydro Power, 3.11%

ENERGI MIX, 2006 (1 million BOE)National (Primary) Energy Mix

Coal , 33%

Gas, 30%

Oil,

20%

Biofuel, 5%

Geothermal, 5%

Biomass, Nuclear, HydroSolar Energy, Wind Power, 5%

Coal Liquefaction

2%

RE,17%

National Energy Mix 2025 (3 million BOE)(Presidential Decree No. 5/2006)

TARGET OF ENERGY MIX, 2006

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INDONESIA’S EFFORT IN REDUCING CO2 EMISSIONS

• Promoting renewable energy sources

• Encouraging energy efficiency improvement measures

• Applying Carbon Capture and Storage (CCS) and

sequestration technology

• Reducing gas flare

• Conserving forestry reserves

• Encouraging the conclusion of Adaptation Fund in

encountering climate change4

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OIL PRODUCTION IN INDONESIAM

illio

n ba

rrel

s/ye

ar

Other PSC’s

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FUEL INDUSTRY POLICY

• Meeting domestic fuel demand

• Encouraging infrastructure development

• Establishing national fuel strategic reserves

• Fuel diversification

• Fuel conservation

• Encouraging environmental friendly fuel : un- leaded fuel, alternative fuel, i.e gas fuel (CNG & LPG) and biofuel which form is liquid and favorable in handling and maintenance

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Briquet Coal1.2%

BIOFUELS (Biooil)3.7%

Electricity40.1%

LPG19.0%

NG6.4%

CNG1.5%

Oil28.1%Briquet Coal

0.1%

BIOFUELS (Biooil)0.0%

Electricity36.1%

OIl53.1%

LPG10.6%NG

0.1%

CNG0.0%

TARGET OF ENERGY MIX, 2010

Household and Commercial 2010Household and Commercial 2006

Transportation 2006 Transportation 2010

Gasoline54.0%

Automotive Diesel Oil45.9%

BIOFUELS (Bio-Diesel)0.0%

NG0.0%

Electricity0.0%

BIOFUELS (Bio-Oil)0.0% BIOFUELS (Bio-

Ethanol)0.0%

Gasoline46.5%

AutomotiveDiesel Oil42.3%

BIOFUELS(bioethanol)7.6% BIOFUELS (Bio-Oil)

1.9%

BIOFUELS (Bio-Diesel)0.4%

NG1.4%

Electricity0.0%

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Electricity13.1%

Oil43.8%

LPG1.1%

Coal22.5%

Gas19.6%

TARGET OF ENERGY MIX, 2010 (continuation)

Power Plant 2006 Power Plant 2010

Industry 2010Industry 2006

Coal46.2%

Gas14.3%

Oil23.7%

Coal-Hybrid0.0%

BIOFUELS0.9%

Geothermal5.3%

Hydro9.6%

Coal71.4%

Oil2.7%

Gas8.3%

Coal-Hybrid2.2%

BIOFUELS0.8%

Geothermal6.8%Hydro

7.8%

Electricity12.4%

Oil27.8%

Biofuel3.1%

LPG1.4%

Coal34.9%

Gas20.4%

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CHALLENGES IN FUEL INDUSTRY

• Transportation has become the biggest challenge for fuel industry in Indonesia since now almost 100% of fuel for transportation comes from oil.

• In addressing such situation to environment and oil conservation, government is encouraging fuel diversification.

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World Situation World Situation –– Climate Change Climate Change Greenhouse gas concentrate from year Greenhouse gas concentrate from year 900 900 to to 20002000

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CH4CO2N20

CH4 [ppbv] CO2 [ppmv] N2 O [ppbv]

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LUBRICANTS INDUSTRY POLICY

• Lubricants industry policy in Indonesia is already open and lead by market mechanism

• Government encourages lubricants producers and consumers to :• Maintain marketed lubricants quality• Produce environmental friendly lubricants• Manage lubricants, yet still concerning

environment

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Ministry of Energy and Mineral Resources www.esdm.go.id