Oil and Gas in Indonesia Still Challenging


[JAKARTA] The business of oil and gas in Indonesia is currently quite challenging and the number of rules and regulations related to the oil and gas industry that overlap both between sectors and between the central government and local government are believed to be one of the key challenges for the oil and gas industry in Indonesia. This has resulted in the industry being not only rated as being “mismanaged” but is also seen to be as a result of over management.

The President of the IPA, Christina Verchere, was one of the speakers at the National Resilience Energy Forum, in Jakarta Thursday (8/9) and she noted that "The Minister has mentioned mis-management, however we think that the conditions that exist today can more precisely be categorized as over-management. When compared with other countries like the United States, the rules relating to the oil and gas industry there are relatively very simple, so this has an impact on the business processes being simple too”.

Christina added that the business processes in Indonesia that are so long will surely have an impact on the production costs required to generate gas to reach the end user. Therefore, the desire of the various parties to commit to a decline in gas prices in the country from the current position of USD 6-10 per mmbtu should be initiated from the government's policy to deregulate the regulations related to the oil and gas industry.

Besides the IPA President, the National Resilience Energy Forumwhich was co-organized by the Alumni Association Defense, Chamber of Commerce and Industry of Indonesia (Kadin) and the Indonesian Employers Association (Apindo), also presented some key stakeholders in the energy sector in Indonesia, namely: the Ministry of Energy Mineral Resources, Ministry of Agricultural and Spatial Planning/ Head of BPN, the Directorate General of Oil and Gas, Directorate General of Electricity, Special Unit of Upstream Oil and Gas (SKK Migas), National Energy Board, PT Pertamina (Persero) , PT PLN, and others.

At the end of the discussion, all speakers agreed that national energy resilience can be realized but it is very dependent on the existing leadership and consistency in the implementation of policies that have been made by policy makers in the energy sector. (PS)

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