INDONESIA AIMS FOR NEW INVESTMENT TO BOOST UP OIL AND GAS PRODUCTION

The Upstream Oil and Gas Special Task Force (SKK Migas) have stated that new investment is needed to increase Indonesia’s oil and gas production. Since last year, SKK Migas has rolled out a road show presenting the country’s oil and gas potential to several international oil companies. They claim that Indonesia is still one of the attractive oil and gas investment destination countries for global investors.

“Throughout 2019, we have brought in several investors from Europe, China and the United States of America. After some changes that have been done by the government to ease investment, they have said that the investment climate in Indonesia is getting more attractive,” said Deputy Chairman of SKK Migas Fatar Yani Abdurrahman.

Even though they already have oil and gas blocks in Indonesia, he added, they are interested to invest more in the upstream oil and gas sector in Indonesia. Some of the companies have also visited SKK Migas’s data room to look closer at Indonesia’ oil and gas potential. The companies are Neptune Energy, Petrochina, Mitsui Oil Exploration Co Ltd, Premier Oil, and BP Plc.

“This means that oil and gas investment in Indonesia is still attractive. Moreover, Indonesia has many unexplored oil and gas basins,” Fatar said.

On the other hand, Pri Agung Rakhmanto, an energy expert, explained that to increase investment, it is not merely about what kind of changes that the government have done. But, the changes should be good enough so that oil and gas investment in Indonesia is seen as competitive compared to other countries in the world.

He thinks that many changes that have been done by the government regarding fiscal incentives was only to restore the conditions that existed before the Law No.22/2001 on oil and gas was implemented. While the PSC scheme flexibility is only now going to be implemented, when in the last 2-3 years, the government preferred the gross split scheme for new contracts.

Data Management

In order to support the government’s aim to attract more investment, the Ministry of Energy and Mineral Resources (EMR) has opened national oil and gas data, following the issuance of EMR Regulation No.7/2019 on oil and gas data management and utilization.

Upstream Oil and Gas Director of DG Oil and Gas, Mustafid Gunawan, explained that to access the oil and gas data, the company should be registered as a member and pay a fee once a year. “The oil and gas companies can access all of the available data once they become a member. However, if the company is not a member yet, they can only access the basic data,” he said.

Mustafid added, the government is still calculating the fee amount that should be paid. (*)