Sunday, 3 June 2012


           Indonesian Petroleum Association (IPA) considers that Presidential Instruction No. 2/2012 is very “Sacred” for finding the best solution for the benefit of all oil and gas stakeholders in Indonesia. The Presidential Instruction will be discussed comprehensively in the plenary session III of the 36th IPA Convention and Exhibition to be held in the future. IPA expected that coordination between Government, especially the Ministry of Energy and Mineral Resources, and stakeholders could improve. Good coordination will finally give a solution to achievement of production level of 1.2 million barrels of oil and gas. “We admitted that so far there has been no coordination, cooperation, and collaboration among Government, oil & gas industry, non-governmental institution. Therefore, the Presidential Instruction becomes very important so that the industry could increase continuously up to a production level at 1.2 million barrels”, Sammy Hamzah, IPA’s Vice President, told Business News.

            The 36th Convention becomes “sacred” as important players in oil & gas industry, including government officials and CEOs of foreign gas companies will unite. This convention is one of the most important events in Southeast Asia oil & gas industry. Indonesia as a country with rapid growth requires energy to continuously accelerate economic activities. But, many of oil & gas producing fields in the western part of Indonesia are already old. Production level will automatically decline. The current trend is new developments in eastern part of Indonesia, even in remote areas and deep waters. All of them require a very large investment and the most modern technology for exploitation of the existing reserve potency. “If the technology and the investment are fulfilled effectively and efficiently, it is beneficial for the Indonesian people. They will not be burdened with high gas price. Like in the United States, its gas production floods the market. The price becomes very low, even reaching USD1. Therefore, IPA expected all stakeholders to build collaboration, coordination and cooperation to make oil & gas industry a national economic foundation”.

            IPA formulated three essential matters to create Indonesian oil & gas industry which is effective and efficient. The three essential matters are: firstly, determining of Indonesia’s energy demand at present and in the future; secondly, cooperation to create an environment for fulfillment of oil & gas demand; thirdly, attempt from all stakeholders to warmly welcome Presidential Instruction No. 2/2012 for achievement of energy objective. “If there is no coordination, cooperation, and collaboration, problem such as licensing arrangement in the regions will continuously become a problem to investment. Sometimes, BP Migas (Oil & Gas Regulator) provided assistance, but it is insufficient”.

            Therefore, in the Convention, the government must make use of the opportunity to build communication with 100 exhibition participants, oil & gas industry, and various other related sectors. Oil & Gas service companies, contractors, government institutions, the media, chamber of commerce will show oil & gas industry best practices and the technology. “Another important thing is that oil & gas industry contributed around USD 35 billions to state revenue. This amount is equal to 21 percent of state revenue from other sectors. Maybe, the amount (from oil & gas industry) is higher than the one from mineral and coal sectors”.

            Oil & gas industry cannot be freed from empowerment and commitment to develop economy, education, infrastructure and health. Oil & gas industry absorbs direct employment of direct investment. “Synergically and simultaneously, oil & gas investment prospect boosts process of technology-transfer to Indonesian people and companies. With high and most modern technology, we will be able to perform deepwater exploitation. Our Coal Bed Methane (CBM) reserve is very high, at 453 TCF, which is the second largest after China. Development of blocks and fields in Kalimantan and Sumatera can increase our energy sources, including gas”.   

 Business News, May 11, 2012

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