Having A Giant Natural Gas Source, Rystad Energy Needs Fiscal Policy

Natural gas (intermediate illustration)

JAKARTA - The discovery of natural gas resources in South Andaman and the North Gang shows that Indonesia has almost half of the natural gas reserves in Southeast Asia.

Country Head Indonesia Rystad Energy Sofwan Hadi said that the support of various parties for this potential resource is urgent so that Indonesia does not lose momentum in achieving national energy security.

According to Sofwan, the challenge is support to monetize this potential resource.

"The condition is, there are opportunities, the potential is very large, but how this project can run so as to convince global investors. That must be a priority at this time," said Sofyan, Tuesday, August 20.

Sofyan said, one of the main supports that is urgent to do is to create the right fiscal policy, including incentives and tax regimes that can ensure the economy of the oil and gas project in the future, as well as the flexibility of Cooperation Contractors (KKKS) regarding the choice of production sharing contract (PSC) gross split or return to cost recovery.

This can be a good choice for KKKS because the characteristics of each working area are different and require a different PSC. In addition, time-based incentives can also encourage the acceleration of project monetization," said Sofyan.

Another urgent support is setting domestic gas prices and infrastructure to ensure gas distribution.

"If domestic gas prices cannot close transport costs, what happens will affect investors' interest in developing these projects," said Sofwan.

According to him, what stakeholders need to remember is that the existence of the oil and gas industry still has a very important role to play in maintaining energy resilience and independence, so that partiality is the key and urgent to achieve this.

Head of the Program and Communication Division of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Hudi D. Suryodipuro said that his party continues to encourage the monetization of projects that have been and will be running to be realized soon.

"SKK Migas and all KKKS continue to work together to develop oil and gas potential in Indonesia to strengthen the role of the upstream oil and gas industry as one of the pillars of energy security," said Hudi.