CEO Forum: IPA CONVEX 2024, Upstream Oil and Gas Industry Agrees to Prioritize Collaboration to Pursue Oil and Gas Production Targets and Decarbonization

JAKARTA, May 13, 2024 – The upstream oil and gas industry is faced with challenges that are not easy besides having to meet increasing energy needs, business actors are also requested to reduce carbon emissions generated from production operations.

Nicke Widyawati, President Director of PT Pertamina (Persero), explained that as a state-owned company, Pertamina is mandated to meet energy demands. In fact, Pertamina budgets more than 62% of its Capital Expenditure (CapEx) for programs to meet energy demands.

“We want to increase production, with the current conditions it takes time, but you still try by budgeting 62% capex to be able to meet energy needs. 15% for low carbon business, we support the government’s target, we have a large allocation of CCS, bioenergy,” Nicke said during the Plenary Session discussion: CEO Forum with the theme Company Strategy Pursuing High Return of Investment and Helping Society Meet NZE at IPA Convex 2024 at ICE BSD, Tangerang, Tuesday (14/5).

However, according to Nicke, as a business entity, Pertamina is also required to make a profit. In addition, the drive to contribute to the pursuit of Net Zero Emissions (NZE) target should also not be forgotten.

One of Pertamina’s steps, said Nicke, to pursue increased production while reducing carbon emissions is to initiate the application of CCS/CCUS technology.

“We also prioritize CCS/CCUS, with potential storage there are 16 CCS/CCUS projects running, 11 of which are conducted by Pertamina. We are targeting to inject CO2 in CCS blocks with a volume of 7,000 tons by 2030,” Nicke said.

Tan Sri Tengku Muhammad Taufik, President and Group CEO of PETRONAS, explained that what Pertamina faces is also faced by Petronas. The best way to face these challenges is to collaborate. Petronas has initiated collaborations and partnerships in 20 countries, including Indonesia. The need to collaborate is even greater with the projected investment requirements in an effort to carry out the energy transition.

“The energy transition requires enormous capital of around US$2 trillion. We must collaborate. The time for competition is over. No company or country can do this alone. There must be collaboration,” said Taufik.

Roberto Lorato, CEO of MedcoEnergi, admitted that the complexity faced by energy companies, especially in the upstream oil and gas sector, is very high. Moreover, there is a mandate to implement energy transition and decarbonization. For this reason, the commitment to implement ESG in the company is key.

Medco will continue the program that focuses on energy transition through decarbonization of operations through the expansion of the gas business, renewable energy such as geothermal and through Solar Power Plant (PLTS) projects.

“Complexity is high. Energy transition is fundamental that must be pursued, but it does require large funds and technology. We maintain everything with ESG commitment,” Roberto said.