IPA Convex 2024 Emphasizes Energy Security as the Main Focus of the Upstream Oil and Gas Industry
JAKARTA, 14 May 2024 - The increasing energy demand drives the upstream oil and gas industry to secure energy supplies. To this end, oil and gas exploration will be intensified to achieve energy security and support national energy needs.
Minister of Energy and Mineral Resources (ESDM), Arifin Tasrif, stated that the government is currently offering potential oil and gas blocks with incentives to stimulate investment in the oil and gas sector. Examples of the incentives include tax facilities and more attractive terms and conditions.
Arifin explained that regulatory improvements are also ongoing. He cited that the final stage of revising Government Regulations No. 27 and 53 of 2017 is underway. "This revision aims to improve the economics of oil and gas projects," Arifin said at the opening of the 48th IPA Convention and Exhibition (IPA CONVEX) at ICE BSD, Tangerang, on Tuesday, May 14, 2024.
In addition to increasing oil and gas exploration and production, the availability of clean energy is also a government focus. According to Arifin, the world is facing a new trend of adapting to the use of clean and renewable energy. The upstream oil and gas industry is also required to apply this trend.
For Indonesia, the presence of natural gas can be a solution for providing clean energy to achieve the net zero emissions target. Additionally, to address the challenges of future clean energy use, upstream oil and gas businesses must implement strategies to reduce emissions. "This is done through the application of technologies such as CCS and CCUS," Arifin said.
To support the development of CCS/CCUS technology, the government has also issued two regulations. Currently, there are 15 CCS/CCUS projects with a total potential storage capacity of 500 gigatons of CO2.
Arifin emphasized that all upstream oil and gas plans and projects can be realized through collaboration among all parties. Therefore, the IPA Convex 2024 event is expected to be a collaborative bridge capable of maximizing the potential of oil and gas resources believed to be still significant.
"It is very important to enhance collaboration and partnerships to address the challenges in the upstream oil and gas industry, namely meeting energy needs while reducing emissions. I invite everyone to actively contribute to increasing investment, oil and gas reserves, and achieving emission reduction targets," Arifin said.
Meanwhile, Yuzaini bin Md. Yusof, President of the Indonesian Petroleum Association (IPA), revealed that the energy transition will continue. However, while waiting for the readiness of new and renewable energy (EBT), the upstream oil and gas sector will play an important role while continuously transforming to reduce carbon emissions. "Gas will play a crucial role in various parts of Indonesia's economy," Yuzaini said.
Efforts to reduce greenhouse gas emissions, Yuzaini continued, must be intensified in production operations. "Although this poses significant technical and commercial challenges and requires special attention," Yuzaini said.
Yuzaini noted that businesses appreciate the government's efforts in preparing specific regulations for the implementation of CCS/CCUS through the Minister of Energy and Mineral Resources Regulation No. 2 of 2023 and Presidential Regulation (Perpres) No. 14 of 2024.
According to Yuzaini, these regulations are the first in Asia, making Indonesia a leading country in CCS implementation. "What Indonesia needs now is the execution of these regulations," Yuzaini said.
He conveyed that during the three-day IPA Convention and Exhibition 2024, it is expected to generate various innovations and constructive discussions on the application of CCS technology and various exploration and production activities to achieve Indonesia's energy security goals.
First Phase WK Auction
At the opening of IPA Convex 2024, the government announced the first phase of oil and gas work area offerings, presented by Dadan Kusdiana, Acting Director General of Oil and Gas, Ministry of Energy and Mineral Resources. Additionally, there were two work area contract signings: Bobara by Petronas and Ketapang managed by Petronas, Saka, and Petrogas.
The five oil and gas work areas up for auction consist of two regular auction work areas:
Pesut Mahakam in East Kalimantan has total estimated reserves of 20 MMBO of oil and 1.1 TCF of gas. Open Signature Bonus minimum: US$400,000.
Panai in Offshore and Onshore North Sumatra and Riau, with total estimated gas reserves of 500 BCF. Open Signature Bonus minimum: US$300,000.
Then, the auction through direct offers includes:
Central Andaman is in the Andaman area, with estimated reserves of 100 MMBO of oil and 500 BCF of gas. Open Signature Bonus minimum: US$300,000.
Amanah in Onshore South Sumatra has estimated reserves of 50 MMBO of oil and 450 BCF of gas. Open Signature Bonus minimum: US$300,000.
Melati in Central and Southeast Sulawesi has estimated reserves of 850 MMBO and 4.5 TCF of gas. Open Signature Bonus minimum: US$ 200,000.
In collaboration with Dyandra Promosindo, IPA Convex 2024 is 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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