Norway in Indonesia Energy ministers open dilogue on Norwegian involvement in Indonesia

(Left) Having designed and built the Sleipner West CO₂ removal module, Kvaerner can offer the samee expertise to Exxon's Natuna Sea development. (Right) Norwegian prime minister Gro Harlem Brundtland led mission seeking closer ties with Indonesia..

The close ties established in recent years between Norway and Indonesia were further strengthened in September when Norwegian prime minister Gro Harlem Brundtland led a high-ranking delegation to the south-east Asian country. The visit was the occasion for the signing of a number of agreements and contracts, worth an overall NKr 1 billion, whereby Norwegian expertise will be brought to bear on Indonesian problems.

An existing agreement on environmental cooperation was renewed, and contracts signed by Blom Mapping Group for seabed mapping, Oceanor for sea monitoring (see separate story), and Indonor for wave power generation. The two countries' energy ministers, Moerdiono and Jens Stoltenberg, signed a Memorandum of Understanding (MOU) on energy cooperation calling for a dialogue to be established on a range of issues including developments in the oil and gas industries, structural issues and the implications of foreign investments in the two sides' energy sectors.

The cooperation will extend to scientific and technical questions, and seminars on topics of common interest will be arranged. Direct contacts on a commercial basis will be encouraged between interested bodies and companies, including the supply industry.

Another MOU was signed by Det Norske Veritas and the Indonesian communication ministry for the formulation of a master plan for tackling marine pollution (see separate story). Agreements were also ratified for projects in areas such as aquaculture and hydropower.

But what would have been most interesting for Norway's offshore contractors and suppliers in the event did not come off. This was a proposed MOU calling for Norwegian participation in the huge Natuna Sea development. This project has the "complexity and the size to interest Norway," in the words of one diplomat, but was not yet "mature". Unfortunately, from an oil and gas point of view, Indonesia's tiger economy is not at present roaring as loudly as it might. Activity in the oil and gas sector is somewhat depressed, according to analyst Wood Mackenzie, with exploration drilling at a low level and a mere four developments under way.

An improvement in the oil price would boost activity levels. So would an easing in the terms offered by Jakarta, according to foreign oil companies. Once an upturn were achieved, activity levels could quickly recover. WM has identified 12 potential development projects which could achieve start-up before the turn of the century. These involve investments of some $3.9 billion to bring on stream reserves estimated at 197 million bbl of oil and 9.9 tcf of gas.

Gas will assume an increasing importance in Indonesia's future energy production. According to WM, while oil output looks set for a steady decline from the 1994 figure of 1.61 million b/d, sales gas production will rise from around 5.5 bcf/d this year to 7.1 bcf/d in 2000. The increase would probably be more rapid were it not for the massive development of the transportation and distribution infrastructure required on land. Ms Brundtland was quick to point out the benefits which Norwegian companies could bring Indonesia. "They can offer Indonesia expertise in all oil and gas related activities," she said. "Production, engineering, contracting, seismic testing, drilling, supply services, environmental services and shipping services."

Norway had come a long way in its ability to make the most of its oil and gas resources, Ms Brundtland told her hosts. "We did this by inviting participation by foreign companies that were ready to offer long-term cooperation, including technological transfer and human resources development. Today, Norwegian companies are in a strong position and can offer similar arrangements to Indonesia."

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