Minister Of Energy And Mineral Resources Arifin Tasrif Explains Reasons For Lack Of Investment Entering The Oil And Gas Sector

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif. (Photo: Doc. Antara)

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif revealed the reasons for the lack of investment in the Indonesian oil and gas (migas) sector for the last 30 years.

Previously, Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan assessed that there was a regulatory discrepancy that resulted in the absence of new investments in the oil and gas sector for the last 30 years.

"No, that's not it," said Arifin when met after the submission of the State Budget Bill for Fiscal Year 2025 and Financial Notes at the DPR RI Plenary Session for Session Year 2024-2025 at the MPR/DPR/DPD Building Jakarta, quoted from Antara, Friday 16 August.

He explained that it started in 2012, where at that time massive drilling was carried out and spent up to 2.5 billion US dollars.

"So, at that time it was 2012, we had time to pick it up. Then in 2012 the incident had already drilled a large amount of 2.5 billion US dollars, then the Cooperation Contract Contract Contractor (KKKS) was dry hole. Well, then from there in other places, they have started to meet new sources. So, they (KKKS) are moving," said Arifin.

He continued, this then creates competition between regions that have a profitable fiscal policy and are less profitable.

"Because we definitely choose that one, right? That's why we have to improve, we have a policy to be able to attract investment again," said Arifin.

Previously, Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan mentioned Minister of Finance Sri Mulyani regarding the discrepancy in regulations which ultimately resulted in the absence of new investments in the oil and gas sector for the last 30 years.

"So, I also told our colleagues from the Ministry of Finance, there is something wrong with you, there has been no investment for 30 years, there must be something wrong with the regulations," said Luhut.

Luhut emphasized that there is a need for improvements to regulatory changes in order to be in line with investment needs, because if no party is interested in investing, then it reflects the problem at home.