Talking In Front Of Oil And Gas CEOs, SKK Migas: Must Be Informative And Not Rigid To Reach The 2030 Oil And Gas Production Target

Illustration. (Photo: Doc. Antara)

JAKARTA - Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto conveyed that efforts to achieve the oil and gas production target in 2022 are full of challenges. However, it is still necessary to take advantage of the momentum of rising oil prices to increase activities that will have an impact on production.

"Moreover, the government has shown its commitment to making the upstream oil and gas industry investment climate more attractive, with various licensing facilities and incentives," he said at the third CEO Forum in 2022 with the theme "Boosting Investment Towards Achieving Long Term Planning", Thursday, March 17.

Furthermore, the Head of SKK Migas said that the upstream oil and gas industry must be able to take the momentum of oil and gas prices, by immediately taking steps to accelerate and improve the implementation of the 2022 work program in particular and investment in upstream oil and gas in general.

Dwi emphasized that oil and gas will continue to play a role and is needed in development, especially with the high world oil price providing an optimal contribution to state revenues.

Meanwhile, in 2021, state revenues from upstream oil and gas will reach 13.67 billion US dollars or equivalent to Rp. 206 trillion and reach 188.8 percent of the 2021 State Budget target of 7.28 billion US dollars.

"However, it should also be noted that the condition of production and lifting achievements in 2021 is still below the target set in the 2021 State Budget and Long Term Plan (LTP) for the Upstream Oil and Gas Industry, so a recovery plan is needed. Therefore, 2022 will be the key so that the LTP target remains on the right track," added Dwi.

According to him, if we can achieve this year's target that has been set, it will become a strong foundation for efforts to close the existing GAP, so that the 2030 target of 1 million barrels of oil production and 12 BSCFD gas will still be realized.

"That's why this CEO Forum is very important. We hope to be equally open, more informative and not rigid, to really raise issues, what SKK Migas can do and support from the Government," concluded Dwi.

Meanwhile, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said that the challenges of the upstream oil and gas industry will increase. Moreover, the Government has expressed a commitment and received support from various parties for the year 2060 to be able to realize net zero emission by fully using new and renewable energy (EBT) as an energy source. The role of natural gas is crucial in the transition period and must be optimized.

Arifin further said that the Government has set a high lifting target in 2022 and has challenges that must be overcome so that the 2030 target can be achieved. So in this forum how can we look for steps and efforts to increase lifting so that the 2022 target can be achieved.

"The government has set a lifting target for 2022 for oil of 703,000 BOPD and gas lifting of 5,800 MMSCFD. To achieve this target can not be done in ordinary ways. We must make extraordinary efforts by conducting massive exploration, applying technology, increasing investment and providing fiscal support," said Arifin.

He explained that the increase in oil and gas prices would provide a profit windfall for the Government and KKKS. But on the other hand, the increasing financial burden on the state is due to the increase in energy and electricity subsidies.

"Achieving the 2022 lifting target will certainly provide positive support for the country, not only regarding state revenues, but also keeping the oil deficit from widening," said Arifin.

Arifin added that the increase in world oil prices does not necessarily increase investment in upstream oil and gas, because at the same time there is an increase in investment in the NRE sector. Increasing oil and gas production in 2030 without investment is impossible to achieve, and it is necessary to make breakthroughs in exploration and attractive terms and conditions.

“Currently, the Government and the DPR are discussing the Oil and Gas Bill. We hope for concrete input, what in the Oil and Gas Bill needs to be regulated to increase investment enthusiasm. In addition, I remind you that the high risk in upstream oil and gas is to minimize it so that KKKS prioritize efficiency so that it can push gas prices at end users to be more competitive," said Arifin.