Still Has 128 Potential Basins, SKK Migas Believes Indonesia's Investment Climate Is Still Exciting

Illustration. (Photo: Doc. Antara)

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that Indonesia still has huge investment opportunities in upstream oil and gas activities. The reason is that there are 128 basins that have the potential to be explored.

SKK Migas Deputy for Operations Julius Wiratno said that of the 128 basins, 20 of them were operational, 19 had been drilled and hydrocarbons were found and 68 basins had not yet been drilled.

"So the investment parameters, especially the attractive plants, are still okay. This is the challenge for the oil and gas industry in the future," he said in a virtual discussion, Thursday, April 14.

According to him, with many basins that have not been worked on, it requires a very large effort to convert resources into reserves.

"This is very challenging for Indonesia's oil and gas from west to east from offshore and onshore. There are basins that have been drilled and hydrocarbons have been found but have not been commercialized, there are undeveloped discoveries that we must cooperate with investors and the government," he continued.

He predicts the oil and gas industry will continue to grow until 2030 -2050 so it is hoped that production and supply activities will also increase even though it is estimated that gas will experience higher production as an alternative energy transition.

Meanwhile, Ali Nasir from the Indonesian Petroleum Association (IPA) assessed that the current high world oil price has a positive impact on Indonesia because it will attract investment in the upstream oil and gas industry.

"However, there are also disadvantages because it will create a large gap between production and consumption. It is recorded that we have to import 700 thousand barrels per day to cover the country's energy needs, which of course will drain our foreign exchange reserves," said Ali Nasir.

According to him, the challenges of the oil and gas industry in the future will be even greater due to the lack of attractiveness of the government, the shifting of investment in oil and gas companies to renewable energy industries and the increasingly stringent banking sector in providing loans for upstream oil and gas industry activities.

Furthermore, he explained, there are 3 criteria for investment in the upstream oil and gas industry, including prospectivity, fiscal term and legal stability.

"Prospectivity or geology is a given from God, we can't do much, but we can maximize fiscal term and legal stability because they are man-made, namely the DPR and the government," he concluded.