Jakarta will struggle to draw investors in oil and gas

Subject

Indonesia's struggle to court investment in oil and gas.

Significance

In an address earlier this month at the Indonesia Petroleum Association (IPA)’s annual meeting, President Joko ‘Jokowi’ Widodo appeared to implicate state-owned oil and gas firm Pertamina in the country’s declining oil production. His government has announced plans for price controls for non-subsidised petrol products ahead of the general election due in April 2019.

Impacts

• Increased government intervention in oil and gas will create new administrative burdens.
• Rising oil prices amid growing dependence on oil imports would lead to regular trade deficits.
• Pertamina may face further punitive action over the recent oil spill off Kalimantan island.