Indonesia ranks among the world's leading petroleum-producing countries. Production in 1990–2000 averaged between 1.3 and1.4 million barrels per day, up from the 1.33 million barrels produced in 1988. Known reserves in 2002 were put at five billion barrels, and since most of the potential sources have not been surveyed, resources may be much larger. Sumatra, the richest oil area, produces about 70% of Indonesian oil. Kalimantan is the second-leading producer; Java and Madura have a scattering of smaller producing wells. Lesser amounts are also produced in Irian Jaya.
Before 1965, nearly 90% of Indonesia's petroleum was extracted by foreign companies and slightly more than 10% by state-owned companies. In March 1965, the government took over all foreign-owned oil companies, but offered them the option of contining operations under Indonesian control and supervision. A public-sector enterprise, Pertamina, was set up to represent the government in all matters relating to the petroleum industry. By the mid-1970s, Pertamina had assumed a dominant role in oil exploration and production and in such related fields as petrochemicals, fertilizers, and natural gas. During the 1980s, Pertamina spent $3 billion per year on high-risk oil development projects, which helped to maintain a 20-year reserve level of oil and a 40-year reserve level of natural gas. In May 1993, reserves estimated at 225 million barrels were discovered (the largest find in Asia in a decade) at the Widuri field. Three major new projects expected to become operational before 2004 are the West Seno field offshore from East Kalimantan (60,000 barrels per day), the Belanek project in West Natuna (100,000 barrels per day), and the Banyu Urip field in Java.
Natural gas production increased rapidly in the 1970s and 1980s, with output totaling 63.4 billion cu m by 1998, as compared with 19.9 billion cu m in 1982. Part of production goes for industrial and domestic use, but large amounts are exported in the form of liquefied natural gas (LNG). Indonesia is the world's largest exporter of LNG; its major customers are Japan, South Korea, and Taiwan.
Power facilities are overtaxed, despite heavy government investment in electrical installations. Total installed capacity in 2001 was 20,822,000 kW, as compared with 10,830,000 kW in 1988. Production in 2000 totaled 87,600 million kWh (up from 2,932 kWh in 1973); of that amount, 81% was from fossil fuels, 14% from hydropower, and 5% from other sources. Electricity consumpion in 2000 was 86.1 billion kWh. The nation's first geothermal electric power station was inaugurated in 1974 in West Java, and a 750 MW hydroelectric plant was completed there in 1985. In 1995, P.T. Perusahaan Listrik Negara (PLN), the state-owned electric company, projected that electricity demand will rise by 14% annually, with a generating capacity at 25,000– 30,000 million kW needed by 2010.