Government and Business Actors Affirm Readiness Towards Environmentally Friendly Upstream Oil and Gas Industry

Stakeholders in the upstream oil and gas sector continue to improve and prepare for a new chapter in the oil and gas industry that shall be able to respond to challenges of environmental sustainability, particularly in minimizing carbon emissions. These preparations include efforts to immediately implement Carbon Capture Storage (CCS) / Carbon Capture Utilization and Storage (CCUS) technology which was discussed in depth at the 2023 Indonesia Petroleum Association Convention & Exhibition (IPA Convex) on 25-27 July 2023 .

Nanang Abdul Manaf, Deputy Head of the Special Task Force for Upstream Oil and Gas Activities (SKK Migas), said that during the three days’ IPA Convex, all parties showed great enthusiasm to ensure that the oil and gas industry shall be able to meet national energy needs.

"On behalf of the government and SKK Migas, I really appreciate all levels of the IPA Board, and all parties involved in organizing this event. You all have contributed to the sustainability of the upstream oil and gas industry," Nanang said during the closing session of IPA Convex 2023, on Thursday (27/7).

One of the core themes elaborated in almost all discussion sessions was the implementation of CCS/CCUS. "CCS CCUS is the primadonna project for the most possible solution, the government has issued Minister of Energy and Mineral Resources Regulation No. 2 of 2023 concerning the implementation of CCS/CCUS in the upstream oil and gas sector. Currently the government is preparing a Presidential Decree, SKK Migas is preparing the procedures, the government is serious about implementing the CCS CCUS project in Indonesia ," said Nanang.

Greg Holman, Vice President of IPA, stated that the three-day sessions provided a clear perspective on how all stakeholders - from government to business actors - share the same opinion that the upstream oil and gas industry plays a key role in the energy transition era. "The government is expected to immediately issue an energy transition roadmap as well as regulatory support that is in line with the upstream oil and gas industry development plan," said Greg.

In addition, IPA this year is more active in providing input to the government through the White Paper document submitted to the Minister of Energy and Mineral Resources (ESDM) at the Opening of the IPA Convex on the first day.

This White Paper was made in a comprehensive manner because it involved all upstream oil and gas business actors in the country and was prepared by Wood Mackenzie. "We hope that the White Paper will be able to provide answers and recommendations that can be followed up as the focus of this year's IPA Convex theme, i.e attracting investment and energy transition for energy security," explained Greg.

At the closing of IPA Convex 2023, winners of the oil and gas block auction offered by the government in the phase I block auction were announced.

Noor Arifin Muhammad, Director of Upstream Oil and Gas Development at the Ministry of Energy and Mineral Resources, said that the announcement of this auction indicates that improvements in the investment climate are starting to show. "The government assures investors that the investment climate will continue to improve," said Arifin.

The winners of this year's first oil and gas block for the Akia block located in Offshore North Kalimantan was the consortium of Armada Etan Limited and Pexco Tarakan N.V. The Akia block has potential reserves of 2 BBO of oil and 9 TCF of gas. The Akia Block will be managed using a cost recovery contract scheme. Signature bonus of US$500 thousand and total commitment of US$7.7 million.

Beluga at West Natuna Offshore was won by PT Medco Energi Linggau which will use a cost recovery contract and has potential reserves of 360 MMBO of oil and 50 BCF of gas. A signature bonus of US$100 thousand and a total firm commitment of US$8 million.

Bengara I was won by Texcal Mahato EP FZCO which has a potential reserve of 91 MMBOE and is a cost recovery contract. The total firm commitment agreed with the government is US$6.5 million.
The government still offers three oil and gas blocks, namely Natuna D-Alpha with potential reserves of 350 MMBO and 230 TCF of gas. This block has high CO2 content, and large potential for CO2 storage.

Next, the Panai block with an estimated reserve potential of around 500 BCF. And finally the Patin block with a total estimated reserve of around 1.2 BBO.

Krishna Ismaputra, Head of the IPA Convex 2023 Committee, stated that several important highlights occurred during the IPA besides the submission of the White Paper document from IPA to the government. IPA Convex this year witnessed the signing of the transfer of participating interest (PI) for the Masela block from Shell to PT Pertamina (Persero) and Petronas. In addition to several gas purchase and sale agreements, the CCS/CCUS development cooperation was made on the sidelines of the IPA Convex 2023.

Based on data from the organizers of the event, IPA Convex was attended by around 21,422 visitors. The number of exhibitors as many as 132 companies and 1274 student delegates and 2276 convention delegates from 22 countries. IPA Convex event is covered by around 254 journalists consisting of 153 media.

IPA Convex successfully held 4 plenary sessions and 4 focus discussions involving 24 speakers, 7 moderators, 2 presenters, 8 panelists and 5 responders. Meanwhile, the Technical Program (TPC) presented 45 presentations in the form of posters, 42 oral presentations, and 8 Core Workshops.

IPA CONVEX 2023 which took place for three days from Tuesday (25/7/2023) to Thursday (27/7/2023) was held in collaboration with the Indonesian Petroleum Association as organizer and Dyandra Promosindo as co-organizer. Several panel discussion sessions involving a number of resource persons contributed to this year's IPA CONVEX. It should be noted that the IPA Convex received support from a number of partners and sponsors, including: PT. Pertamina Hulu Energi as the Titanium sponsor; MedcoEnergi, Elsewedy Electric, COSL, BP Indonesia, Wood Mackenzie, PETRONAS Indonesia and Exxonmobil Indonesia as Platinum sponsors; Energi Mega Persada and Mubadala Energy as Gold sponsors; and Conrad Asia Energy Ltd, Sinopec International Petroleum E&P Corporation (SIPC) Indonesia, Chevron, Harbor Energy, and INPEX MASELA LTD as Silver sponsors. (**)

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