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Indonesia’s leader must move fast to stave off energy crunch

As falling production and rising energy imports start to take their toll on the wider economy, it is clear Indonesia needs to reshape its oil and gas regime to lure much-needed upstream investment. But is the incoming president up to the challenge?

The recent announcement that US major Chevron will delay its $12 billion deep-water project in Indonesia does not bode well for the former Opec member. Above all, it highlights one of the greatest challenges facing the incoming president, Joko Widodo, when he takes office this month. The archipelago, home to one of Southeast Asia’s fastest-growing economies, faces a crippling energy crunch. The upstream oil and gas sector has to provide 47% of total primary energy needs in 2025, or 3.7m barrels of oil equivalent per day (boe/d). Analysts estimate a 2.5m boe/d shortfall of supply in 2025. Muted activity in exploration drilling and disappointing reserves replacement rates  suggests the gover

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