Pursuing Oil Lifting Target, Aspermigas: Improve Governance

Illustration (Photo: Doc. Antara)

JAKARTA - The government continues to make improvements to anticipate the fulfillment of domestic energy needs in the future.

One of the strategic policies adopted is to set a target for oil production of 1 million barrels of oil per day (BOPD) and natural gas of 12 billion standard cubic feet per day (BSCFD).

Meanwhile, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) reported that the realization of Indonesia's oil and gas lifting throughout the first semester of 2022 was still far below the target of around 87 percent of 614.2 thousand barrels per day (BOPD) for oil and 532 million cubic feet per day (BSCFD) or 92 percent for gas.

Secretary General of the Association of Oil and Gas Companies (Aspermigas), Moshe Rizal, said he was optimistic about the target.

However, he admitted, Indonesia's oil and gas sector has big challenges that require reforms and improvements in terms of oil and gas governance.

"As Indonesian citizens, we must remain optimistic, but the challenges are enormous. It's not about changing again, but there must be reforms," he said in Jakarta, Monday, July 18.

He added that currently the Indonesian government has more positive regulations to facilitate the negotiation process with investors to provide added value from the economic side of oil and gas products.

"But that's all because our competition is very tight and difficult and we have experienced this for decades. To increase investors' trust in the government it takes extraordinary time and ability, especially Indonesia's production which is still far from the target," he explained.

The condition of Indonesia's aging oil and gas fields requires additional investment and technology to boost production, while the world is being hit by uncertainty so that investors tend to hold back on investment.

"We see that massive fields are also difficult to find investors such as IDD and Masela. It is difficult because the fields are massive and of course require a large Capex, so the level of risk is there," concluded Moshe.

Previously, the Head of the Special Task Force for Upstream Oil and Gas Activities (SKK Migas), Dwi Soetjipto revealed that the realization of production and lifting was still lower than the APBN target.

Dwi said that one of the reasons was due to the unplanned shutdown and the delay in the completion of the national upstream oil and gas strategic projects, namely Jambaran-Tiung Biru and Tangguh Train 3 which had been included in the calculation in the preparation of lifting targets in the 2022 State Budget.

The massive development well drilling program carried out by KKKS outside EMCL has been able to show positive results by being able to withstand the rate of production decline and is currently in an increasing production phase.

"We also continue to strive to complete national upstream oil and gas projects, including national strategic projects for the upstream oil and gas sector," he said at a press conference on the achievements and performance of upstream oil and gas in the First Semester of 2022 in Jakarta, Friday, July 15.