Government and Business Collaboration Boosts Upstream Oil and Gas Industry Competitiveness During the Energy Transition
Government and Business Collaboration Boosts Upstream Oil and Gas Industry Competitiveness During the Energy Transition
TANGERANG, May 16, 2024 - The government has called on businesses to participate in improving the investment climate in the upstream oil and gas industry. This involvement is expected to produce policies that address the challenges facing the upstream oil and gas industry during the energy transition era.
Shinta Damayanti, Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), stated that one of the outcomes of business involvement in improving the investment climate is the government's openness to issuing regulations that can stimulate investment.
The government is not only offering more attractive terms and conditions during oil and gas block offerings but is also open to providing tax incentives during the development phase of oil and gas blocks. "The Ministry of Energy and Mineral Resources is currently finalizing the revision of Government Regulation Nos. 27 and 53 of 2017, which are expected to enhance the economic viability of oil and gas projects," Shinta stated at the closing of IPA Convex 2024 on Thursday, May 16, 2024.
Shinta agreed with the President of IPA, who mentioned in the opening of IPA Convex 2024 that the significant gas discoveries in recent years have changed Indonesia's position in the oil and gas industry in the Asia-Pacific region.
"We must be able to compete to attract investment through fiscal and non-fiscal policies. Indonesia must also be able to overcome investment challenges and build investor confidence," Shinta said.
She believes that Indonesia is on the right track and is confident that the oil and gas industry is not a "sunset industry." This optimism is further boosted by recent gas discoveries in Layaran and Geng North.
"We are grateful for the good news last week that offshore exploration in South Andaman has again found significant gas reserves. This business development is a positive signal that Indonesia's upstream oil and gas industry still has promising prospects and continues to attract investor interest," Shinta explained.
The government and businesses still have work to do to achieve production targets or at least meet the Long-Term Program (LTP) targets. The 2023 production realization was 606 thousand barrels per day (BPD) and 5,476 million standard cubic feet per day (MMscfd) of gas, below the LTP targets of 691 thousand BPD of oil and 6,382 MMscfd of gas.
"The head of SKK Migas also mentioned an adjustment period of about two years," Shinta added.
Yuzaini bin Md. Yusof, President of the Indonesian Petroleum Association (IPA), appreciated the commitment shown by the Indonesian government, which continues to take the initiative to improve regulations and strive to create a conducive investment climate.
"All of this is very important in ensuring the success of the upstream oil and gas business in Indonesia. Therefore, we are confident that our investments in Indonesia are protected by a strong legal framework and supportive regulations. We have also heard from CEOs and experts who conclude that we can overcome the challenges of the energy transition through good collaboration," Yuzaini explained.
Krishna Ismaputra, Chairman of the IPA Convex IPA 2024 Committee, acknowledged the enthusiasm of all parties involved in this year's IPA event. This year, a total of 29,919 visitors attended, a significant increase from last year. Additionally, there were 2,726 delegates, up from 2,276 in 2023. The number of participating countries also grew, reaching 51 compared to 22 last year.
There was also an increase in exhibitors, with 179 this year compared to 132 last year. Sponsors grew from 28 last year to 38 this year. This year's IPA Convex also featured more technological developments, with 11 technology forum sessions compared to just one last year. "We hope this is a positive signal that the industry is indeed growing," Krishna said.
At the closing event, the favorite booths were announced based on visitor choices. The winners were PT Pertamina Hulu Energi in first place, MedcoEnergi in second, and Asiarev in third.
In collaboration with Dyandra Promosindo, IPA Convex 2024 was fully supported by sponsors from national and international oil and gas companies such as PT Pertamina Hulu Energi as a titanium sponsor; bp Indonesia, Energi Mega Persada Group, ExxonMobil Indonesia, MedcoEnergi, Mubadala Energy, and Wood Mackenzie as platinum sponsors; ADES, PETRONAS Indonesia, and SLB as gold sponsors; and COSL, Harbour Energy, INPEX, and SINOPEC as silver sponsors.
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