The allure of upstream oil and gas investment in the country is increasingly attractive, as reflected in the commitment of a number of Cooperation Contract Contractors (KKKS) to continue investing in exploration activities.
A number of global oil and gas giants have also agreed to achieve a large target of oil production of 1 million barrels per day (BPD) and gas of 12 billion standard cubic feet per day (BSCFD) by 2030.
Through the signing of the Bali Commitment which was carried out at the CEO Forum at the 2023 International Convention on Indonesian Upstream Oil and Gas at the Bali Nusa Dua Convention Center, Badung Regency, Bali, Thursday, September 21.
The KKKS CEOs also promised to prepare a massive 2024 work program and budget, aggressive, and efficient. According to reviews by CEOs of international and national oil and gas companies, Indonesia is still an important portfolio.
Starting from oil and gas companies from Italy, namely ENI, ExxonMobil (United States), Petroliam Nasional Berhad or Petronas (Malaysia), Repsol SA (Spain), British Petroleum (England), to PT Medco Energi Internasional Tbk, and PT Pertamina ( Persero) invests more heavily in the oil and gas sector.
Director of ENI Muara Bakau BV, Roberto Daniele, said he was serious about investing more intensively in the exploration side of oil and gas fields. Currently, ENI together with PT Pertamina (Persero) have established strategic cooperation to carry out joint exploration in the Mahakam Block.
Apart from that, ENI will also carry out more massive drilling for wells and exploration in the next 4 years. According to Roberto Daniele, this commitment shows Indonesia's important position in the company's portfolio.
Moreover, Indonesia still has large oil and gas reserves. Based on records from the Ministry of Energy and Mineral Resources, Indonesia's proven natural gas reserves even reach 41.62 trillion cubic feet (TCF). Apart from that, Indonesia still has 68 potential basins that have not been explored.
Carole Gall
President of ExxonMobil Indonesia Carole Gall said that Indonesia has all the segments that ExxonMobil must offer. We have upstream and downstream such as fuel, lubricants, chemicals, and energy transition. Of all the Exxon affiliates in the world, it is rare to have all segments in one place together, but Indonesia has it all.
It is not surprising that ExxonMobil remains committed to continuing exploration investments in a number of fields and open areas. Carole Gall said ExxonMobil would drill again in Banyu Urip for 1.5 years.
Nevertheless, a number of problems still confront the national upstream oil and gas industry, at least There are a number of crucial things that investors should note, including contract certainty, competitive and durable regulations, and ease of investing.
The Indonesian government is asked to increase the competitiveness of investment in upstream oil and gas by improving a number of fiscal and non-fiscal policies at a time of increasingly tight competition with a number of countries.
In accordance with the above, Carole Gall asked the Indonesian government to improve the terms and conditions of upstream oil and gas, especially related to the terms and procedures for procurement of goods and services and auctions for oil and gas projects after approval of the Plan of Development/PoD for oil and gas fields have been obtained by the contractor.
According to Carole Gall, the process of procuring goods or auctioning oil and gas projects that is too long makes the return on investment and sustainability of the project unattractive for investors.
Similar complaints were also made by other KKKS, including Petronas. This oil and gas company from Malaysia highlights the issue of certainty in contracts and fiscal terms in the oil and gas industry.
Yuzaini Bin Md Yusof
Petronas will support the Indonesian government to produce 1 million barrels of oil. Petronas Indonesia CEO Yuzaini Bin Md Yusof said Petronas would explore new areas in Indonesia.
INVESTMENT OPPORTUNITIES
Meanwhile, Dwi Soetjipto, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK MIGAS), emphasized that Indonesia continues to Offer investment opportunities in the oil and gas sector and is ready to improve fiscal policy and provide various incentives.
Dwi Soetjipto said that in overcoming the energy trilemma, a broader collaborative effort is needed between the government, IOC, NOC, and policymakers, namely the Indonesian government. In line with this, investment support is needed so that exploration and development activities for oil and gas fields can be carried out on a massive scale.
Responding to various input and complaints submitted by energy observer investors and founder of the ReforMiner Institute, Pri Agung Rakhmanto assessed the need for regulations regarding the latest time limit from processing to reaching the PoD approval decision. Pri Agung Rakhmanto said that the longer it takes, the relative economic value will decrease, and also increase the uncertainty factor if there is no decision immediately.
Meanwhile, based on SKK MIGAS calculations, the oil and gas sector requires a very large investment of more than US$ 20 billion per year to support the 2030 oil and gas production target. Overall, the funding requirement reaches at least US$ 186.7 billion. to be able to achieve the oil production target of 1 million BOPD and natural gas 12 BCSFD by 2030.
Bisnis Indonesia ,Page-4-Saturday, Sept 23, 2023
