Upstream Oil and Gas Industry as a Key Player in Reducing Carbon Emissions

TANGERANG – The upstream oil and gas industry is a crucial player in reducing carbon emissions within the extractive industries. This is due to the high risks and significant costs associated with implementing Carbon Capture Storage (CCS) technology.

The Ministry of Energy and Mineral Resources (ESDM) recently published the National Carbon Storage Potential for 2024 to support the CCS program. The potential is estimated at 572 billion tons of CO2 in saline aquifers and 4.85 billion tons of CO2 in depleted oil and gas reservoirs. This substantial storage capacity significantly supports long-term emission reduction targets, positioning the upstream oil and gas industry at the forefront of realizing CCS.

Noor Arifin Muhammad, Director of Environmental Engineering at the Directorate General of Oil and Gas, Ministry of Energy and Mineral Resources (ESDM), stated that Indonesia is a newcomer to CCS implementation. Therefore, the government, in formulating regulations, considers practices from other countries and involves international experts.

"Firstly, we need bilateral agreements between governments, and then the business details will be discussed at the inter-company level," said Noor Arifin during Plenary Session 3: "CCS as the Potential New Business Opportunity for Upstream Players and Supporting Economic Growth" at IPA Convex 2024 in ICE BSD, Tangerang, on Wednesday (15/5).

Dan M. Sparkes, VP Subsurface Asia Pacific and India BP Indonesia, revealed that CCS technology is available, but the different characteristics of each region influence CCS implementation. At Tangguh, for example, CCS planning was in place even before gas production began.

"CCS at Tangguh started to be developed even before gas production began. But it is an economic issue," said Dan.

BP has the opportunity to gain direct benefits by reinjecting CO2 into the reservoir, helping to offset the high costs associated with CCS implementation. "Enhanced gas recovery is fundamental for BP. Subsidies are not a long-term solution," stated Dan.

Belladonna Troxylon Maulianda, Executive Director of the Indonesia CCS Centre, emphasized that despite the complex challenges of CCS implementation, the oil and gas industry remains at the forefront of its realization.

"If not the upstream oil and gas industry, who else can implement CCS? There are other industries, like petrochemicals, but what about human capital and technology? It would take a long time if done by other industries," explained Belladonna.

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