Sector
Fishery
Indonesia, boasting the title of the world’s largest archipelagic country with a vast sea area of 5.8 million square kilometers, stands as one of the largest producers and suppliers in the global fisheries market. The abundance of sea area provides Indonesia with a wealth of fisheries products, making fisheries a national leading sector in the country.
View moreOther Sectors
Fishery
Indonesia, boasting the title of the world’s largest archipelagic country with a vast sea area of 5.8 million square kilometers, stands as one of the largest producers and suppliers in the global fisheries market. The abundance of sea area provides Indonesia with a wealth of fisheries products, making fisheries a national leading sector in the country.
There are 23 regions where fisheries stand out as a leading sector, supporting local economies and providing food security. These regions encompass Aceh, Bengkulu, Riau, Lampung, South Sumatra, Central Java, Bali, West Nusa Tenggara, East Nusa Tenggara, Central Kalimantan, South Kalimantan and North Kalimantan. Other regions include Central Sulawesi, Southeast Sulawesi, South Sulawesi, West Sulawesi, North Sulawesi, Gorontalo, Maluku, North Maluku, Papua, West Papua, and Bangka Belitung.
In 2022, Indonesia’s fisheries sector contributed a total of Rp505 trillion to the country’s gross domestic product (GDP). Building this strong foundation, the country set an ambitious target of reaching US$7.2 billion in fishery exports by the end of 2023. Previously, total fishery product exports had hovered around US$5 billion to US$6 billion.
Supporting the sector’s contribution to the country’s GDP is its production. Throughout the third quarter of 2023, Indonesia’s fisheries production totaled 24.74 million tons. This figure includes both capture fisheries and aquaculture. In aquaculture, the main commodities are seaweed cultivation and shrimp cultivation, while in capture fisheries, the main commodities are tuna, skipjack tuna, and mackerel tuna.
Furthermore, Indonesia’s fisheries sector is experiencing a surge in investment. By the third quarter of 2023, the sector had attracted a total of Rp9.56 trillion in investment, with significant contributions from a mix of domestic sources at Rp5.32 trillion, foreign investors at Rp1.4 trillion, and credit sources at Rp2.84 trillion. Notably, China is the largest foreign investor, contributing Rp370.74 billion, followed by Malaysia with Rp240.4 billion, and Switzerland with Rp152.89 billion, highlighting the increasing international interest in Indonesia’s fisheries potential.
While Indonesia boasts impressive fisheries production and growing investments in its fisheries sector, it is vital to uphold fisheries regulations. These regulations ensure that this valuable sector thrives alongside healthy marine ecosystems. It is reported that Indonesia is scheduled to enforce a new fisheries policy in 2025, which will see quotas assigned to industrial, local, and non-commercial fishers across six designated fishing zones, covering all 11 fisheries management areas (FMAs) in Indonesia. The new quota system responds to a worrying rise in overexploited FMAs, which have increased to 53 percent from 44 percent in 2017.
Latest News
PT Nations Petroleum, an oil and gas company linked to businessman Hashim Djojohadikusumo, President Prabowo Subianto ’s younger brother and special climate and energy envoy, has committed US$103.3 million to three years of work on the Natuna D-Alpha block, prompting questions over why the relatively new player is willing to take on such an ambitious bet.
One of Indonesia’s largest undeveloped gas resources that has eluded development for decades, the block presents formidable technical and commercial challenges, including gas containing more than 70 percent carbon dioxide (CO2).
The scale of Nations Petroleum’s commitment is striking, not only because of the block’s complexity but also because the company lacks the track record of the major international oil companies that have previously sought to develop it.
Industry players describe Nations Petroleum as a new and unproven player that would likely need a major international partner to provide the technology and financing required to develop D-Alpha. This raises questions about the company’s financial and technical capacity to take on the block, as well as speculation over why it is willing to commit so much to a project that has defeated previous development attempts.
The block’s history dates back to 1980, when Pertamina and ExxonMobil subsidiary Esso Natuna signed a production sharing contract (PSC). Pertamina and Esso Natuna initially held equal 50 percent shares but in 1996, Pertamina transferred a 26 percent interest to ExxonMobil’s Mobil Natuna, leaving the United States major with a 76 percent stake and Pertamina with 24 percent.
The contract was eventually terminated after the contractor failed to submit a feasibility study demonstrating D-Alpha’s commercial viability per the agreed deadline.
The government handed responsibility for the block to Pertamina in 2008, seeking to revive its development with international partners. In 2010, Pertamina formed a consortium with ExxonMobil, France’s Total and Malaysia’s Petronas.
Petronas was replaced by Thailand’s PTT Exploration and Production (PTTEP) in 2012 and then Total subsequently withdrew, leaving behind a trio. By 2017 ExxonMobil and PTTEP had also withdrawn, bringing the consortium to an end and leaving Pertamina as the sole party.
The contrast with Nations Petroleum is considerable: ExxonMobil, Total, Petronas and PTTEP were all established international energy companies with extensive upstream operations and experience in technically challenging projects, yet they were unable to develop D-Alpha for commercial production.
The entity with the closest relevant experience within Hashim’s Arsari Group is PT Nations Natuna Barat, which is acquiring a 75 percent non-operated working interest in the Duyung PSC, which is developing the Mako gas field in the West Natuna basic. But that experience is both indirect and considerably smaller in scale than what D-Alpha requires.
The scope of the challenge also helps explain another view among industry players: that Nations Petroleum’s role in the block could primarily be as a source of capital rather than as the lead in its development. This has in turn fueled questions about the company’s ability to develop the block without a major international partner.
Hashim’s blood ties to Prabowo and his standing as a longtime political ally has added another layer of scrutiny, leading to speculation that political considerations may have played a role in awarding the block to Nations Petroleum.
Nevertheless, Pertamina cannot be expected to develop Natuna D-Alpha alone. The block presents an unusually difficult development proposition, while Indonesia has a strong interest in bringing its large undeveloped gas resources into production as domestic energy demand rises and oil and gas output remains under pressure.
Increasing domestic production is also an important part of the government’s broader energy security agenda, making D-Alpha strategically important despite the challenges involved.
The scale of the potential development is reflected in a 2010 estimate from the Energy and Mineral Resources Ministry pointing to a required investment of around $52 billion. This estimate, released before the doomed four-way consortium attempted to advance the project, indicates the formidable technical and commercial challenges involved, including the field’s roughly 70 percent CO2 content.
For now, Nations Petroleum’s involvement remains focused on exploration and early-stage appraisal. The company will conduct geological and geophysical surveys and process 3D seismic data covering 591 square kilometers of the Natuna D-Alpha block. It will then carry out additional exploration studies, including drilling an appraisal well and an exploration well.
The results of this preliminary work will help determine whether Nations Petroleum can develop D-Alpha beyond the cycle of failed attempts that has defined the block for decades.
