The Oil, Gas, and Geothermal Mining Sector Records Contraction Over the Past Five Years

The Central Bureau of Statistics (BPS) reported that the gross domestic product (GDP) of the oil, gas, and geothermal mining sector at current prices (ADHB) amounted to Rp461.7 trillion in 2021.

Measured in terms of GDP at constant 2010 prices (ADHK), the oil, gas, and geothermal mining sector contracted by 4.42% last year compared to the previous year.

This contraction marks the fifth consecutive year in the last five years and the ninth time in the last eleven years, as shown in the graph.

High and risky investment costs deter investors from investing in this sector. This has led to a continuous decline in Indonesia's oil production due to the declining production of aging oil wells and limited discovery of new wells.

Indonesia's oil and gas fields located in deep waters pose another challenge for investors in this sector.

Indonesia, once a member of the Organization of the Petroleum Exporting Countries (OPEC) and an oil exporter, now has to import oil to meet its ever-increasing domestic fuel needs.