Indonesia's Texas? Rural Java braces for oil boom

Few things seem to happen at speed in this sleepy Java town where rickshaws ply the streets. But this rural area of rice fields and teak forests is set to be transformed by Indonesia’s biggest oil find in years.

Oil production could start to flow from the huge Cepu field straddling East and Central Java later this month and eventually add millions of dollars to the coffers of local governments, as well as an influx of workers and a wave of new expectations.
The head of the Bojonegoro district, where most of the Cepu field lies, wants people to keep their feet on the ground.

“I don’t want my people to have false dreams. Yes maybe it will be like Texas here, but my people can’t get access to that,” regency head Suyoto said in an interview in his modest offices. Southeast Asia’s biggest new oil field is estimated to contain 350 million barrels of crude, currently worth more than $24 billion on global markets. It also has big reserves of gas.

“They imagine that they will become rich with the oil and gas,” said Suyoto, 44, who like many Indonesians goes by one name and was previously the rector of a local university.

The Bojonegoro regency, which has a population of about 1.2 million, is currently the 4th poorest district in East Java, relying on a rural economy based on rice, corn and tobacco.

Suyoto wants to prioritize using the district’s share of oil revenue, which is due to hit an annual peak of 2 trillion rupiah (about $200 million) in the next few years, to develop its pot-holed roads and upgrade agriculture through irrigation and greater use of livestock such as cattle and sheep.

Reuters