Province

West Papua

Overview Economy

Papua – West Papua

West Papua, previously known as West Irian Jaya, is a province of Indonesia located on Papua Island. The province has the Pacific Ocean lapping at its northern shores, and to its west lies the Southwest Papua province along with the Halmahera and Ceram Seas. Its southern border is the Banda Sea, while its eastern border is bounded by Central Papua province and Cendrawasih Bay.

Covering an area of 99,398 square kilometers, West Papua is home to 568,805 individuals and is divided into 13 districts. Manokwari, a coastal town in Mankowari regency, serves as both the administrative center and capital city of West Papua. Manokwari also thrives as West Papua’s center for business and economic activity. Moreover, the city is well known as the “Fruit City” of West Papua as it boasts a rich variety of fruits such as durian, rambutan, mango, avocado, and matoa.

West Papua presents a diverse landscape of religious beliefs, ethnicities, and languages. Almost half of the population adheres to Christianity at 53.32 percent, followed by the Muslim population at 38.12 percent, and Catholics at 8.40 percent, with other religions representing less than one percent. This rich tapestry extends to its people, with indigenous Papuans, encompassing ethnicities such as the Lokal, Arfak, Biak, and Yapen people, forming the majority of the population. Their traditions and languages contribute significantly to the cultural vibrancy of West Papua.

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Economic Description

West Papua boasts a vibrant economy. In 2023, the province’s economy generated a significant Gross Regional Domestic Product (GRDP) of Rp 40.9 trillion. The economic landscape is driven by several sectors, with the processing industry contributing the largest at Rp 16.1 trillion, followed by the mining sector at Rp 9.3 trillion, and the construction sector at Rp 5 trillion.

Although the processing industry contributes the most to West Papua’s GRDP, the mining sector, as a leading sector in the region, holds substantial potential. The sector’s main commodities include oil, gas, and geothermal. Additionally, gold is also a leading commodity in the mining sector. West Papua's rich gold deposits offer immense potential for mining sector development, attracting investors with a keen eye for valuable resources.

Construction, while among the top three contributors to the province’s GRDP, is not the province’s leading sector. Other sectors such as fisheries and tourism are considered leading sectors in West Papua. The province’s wealth of marine resources offers ideal conditions for flourishing fish farming, with the fisheries sector contributing around Rp 1.4 trillion in GRDP. The sector’s main commodities include tuna, skipjack, and mackerel tuna.

Furthermore, the tourism industry in West Papua is experiencing steady growth, showcasing the province’s well-managed potential for sustainable tourism. Investment opportunities abound in initiatives such as the integrated tourism development in the Mount Botak area, which includes tourist facilities, café and restaurants, and the construction of public facilities. This development aims to establish Mount Botak as a prominent tourist destination for both domestic and international visitors within West Papua.

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Latest News

January 2, 2025

British oil and gas company British Petroleum (BP) plans to invest US$7 billion (about Rp110.95 trillion at Rp15,850 per US$1) in Indonesia. The investment would be directed to the Tangguh Ubadari, Carbon Capture Utilization and Storage [CCUS], and Compression (UCC) project in Teluk Bintuni Regency, West Papua Province.

Energy and Mineral Resources Minister Bahlil Lahadalia said that the investment decision was made after an evaluation by BP and the Indonesian government, the latter through the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) SKK Migas.

"The investment of around US$7 billion is very large, and it also supports national oil and gas production. Most importantly, it [would] raise the [local] region's added value, increase regional income, and [would] have a positive multiplier effect for the region," said Bahlil on Nov. 25, 2024.

Bahlil said that his ministry  appreciated the investment decision of BP and its partners to the Tangguh UCC project. He added that the decision is proof that the oil and gas industry in Indonesia is still promising and can attract investment from abroad.

"[The Tangguh UCC project] is in line with President Prabowo's direction to increase oil and gas production and lift. With the BP Tangguh project, the government will place greater focus on increasing oil and gas production," Bahlil stated.

The final investment decision from BP on this project was received by Prabowo during his visit to London, Englandfor the momentum of the CEO Roundtable Forum on Nov. 21, 2024.

"I met with the leaders of large companies, there are 19 figures here. They have committed to investing US$8.5 billion. This shows their optimism about our economy," said the president.

The Tangguh UCC project is a large-scale endeavor that has the potential to become the first CCUS hub in Indonesia. The gas reserves of the UCC Project are around 3 trillion cubic feet (TCF), and they are planned to be onstream in 2028. The project has the potential to have a 1.8 gigatons of CO2 storage capacity, and 15 million tons of CO2 would be injected from the emissions of Tangguh liquefied natural gas operating facilities in the project's early phase.

The Tangguh UCC project includes the development of the Ubadari gas field, enhanced gas recovery through CCUS at the Vorwata field, and the installation of onshore compressors - which would be expanding and utilizing existing infrastructure at the Tangguh LNG facility in West Papua.

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