Upstream Oil and Gas Industry Expects Continuous Improvement

The upstream oil and gas industry still plays an important role in supporting national energy security.

KOMPAS/TOTOK WIJAYANTO

Landscape of the East Pondok Aren-001 exploration well area in Sukawijaya Village, Tambelang, Bekasi Regency, West Java, Saturday (23/12/2023).

JAKARTA, KOMPAS — The upstream oil and natural gas or oil and gas industry places its hopes on the elected 2024-2029 presidential and vice-presidential administration, Prabowo Subianto-Gibran Rakabuming Raka so that there will be continuous improvements in the sector . Despite a number of challenges, the upstream oil and gas industry still plays an important role in energy security. The large potential of resources, especially natural gas, must be optimized.

In the last few years, amidst the strengthening demands of the energy transition, the upstream oil and gas industry has still faced challenges, including the lack of optimal realization of ready-to-sell production (lifting) petroleum, while the target of 1 million barrels of oil per day by 2030 awaits. However, on the other hand, there are high hopes for the discovery of jumbo natural gas sources in 2023.

Executive Director of the Indonesian Petroleum Association (IPA) Marjolijn Wajong assesses that the achievements of President Joko Widodo's government in the upstream oil and gas sector, in general, are relatively good. Therefore, it is important that the 2024-2029 government improves it from all aspects.

“Currently it is between pretty good and good. So, (next) don't go backwards, but forward. We know that making policy in recent years has not been easy. But, is that enough? No. Because other countries are continuing to move (increasing their achievements). "There must be continues improvement," said Marjolijn on the sidelines of the Road to IPA Convention & Exhibition 2024 press conference, in Jakarta, Tuesday (7/5/2024).

Also read: The Role of the Upstream Oil and Gas Sector is Still Needed

Marjolijn added that the next government must be given a chance. The transition from the Joko Widodo-Ma'ruf Amin administration to Prabowo-Gibran is also expected to run smoothly by upstream oil and gas industry players.

One of the efforts made by the upstream oil and gas industry in energy transition is the development of Carbon Capture and Storage (CCS) technology. In early 2024, President Regulation No. 14 of 2024 will be issued regarding CCS. This regulation complements Ministerial Regulation No. 2 of 2023 regarding the Implementation of CCS and CCUS in Upstream Oil and Gas Business Activities.

CCS will also be one of the topics that will be discussed and reviewed at the 2024 IPA Convention & Exhibition which will be held at ICE BSD, Tangerang Regency, Banten, 14-16 May 2024. "Currently (CCS) is more at the implementation stage. However, in IPA Convex 2024 there will be a percentage from the Fiscal Policy Agency regarding trading. "We will talk about regulations," said Marjolijn.

The Chairman of the IPA Convex 2024 Committee, Krishna Ismaputra, stated that discussions and meetings at IPA Convex are not intended to address immediate responses related to upstream oil and gas incidents, but rather for long-term interests. There will be various discussion sessions that address several upstream oil and gas issues by presenting CEOs in the upstream oil and gas industry.

”(Including) how energy security (energy security) can continue to develop. Because, we have the potential, especially natural gas. "So, in IPA Convex 2024, we don't just talk about how good it is, but what the implementation looks like," said Krishna.

The IPA Convex 2024 is also expected to provide input for the government in optimizing the oil and gas sector to support Indonesia's economic growth. In addition, the 48th edition of the IPA Convex is also held to achieve the energy trilemma while meeting the target for reducing carbon emissions.

KOMPAS/ADITYA PUTRA PERDANA

The atmosphere of the Indonesian Petroleum Association (IPA) Convention & Exhibition 2023 at ICE BSD, Tangerang Regency, Banten, Wednesday (26/7/2023).

Supply chain

Separately, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is optimizing the function of supply chain management to strengthen the national upstream oil and gas industry. This is also in line with the target of producing 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030.

"Currently, drilling activities and strategic upstream oil and gas projects are increasing. Good supply chain management is an effort to support operational activities. "Proper supply chain management can accelerate the increase in oil and gas production and reduce cost recovery figures (recovered production costs)," said SKK Migas Deputy for Business Support Rudi Satwiko in a press release, Monday (7/5 /2024).

Also read: Indonesia's oil production has not met expectations

To support that, SKK Migas held the Indonesia Upstream Oil & Gas Supply Chain Management (SCM) Summit 2024 after being absent for nine years. The pre-event activities will be held in Surabaya and Batam in June and July 2024. The main event will be held at the Jakarta Convention Center on August 14-16, 2024.