Observers Of The Scarcity Value Of Oil And Gas Lifting Hindering Is Important For Investment

Illustration (Photo: Doc Antara)

JAKARTA - Executive Director of the Reforminer Institute, Komaidi Notonegoro, assessed that cutting regulations that are considered to be an obstacle to oil and gas lifting is important to increase investment attraction, and accelerate production, thereby realizing energy self-sufficiency.

"It is important to cut investment barriers, so we appreciate the government's plan to resolve investment and bureaucratic barriers in the upstream oil and gas sector," said Komaidi as quoted by ANTARA, Thursday, November 21.

According to him, this is in line with the Astacita program of President Prabowo Subianto and Vice President Gibran Rakabuming Raka which has set energy self-sufficiency as one of the priorities.

Komaidi said that the main challenge in the upstream oil and gas sector is still related to the revision of the Oil and Gas Law which has not been completed since 2008.

"Regulation is the main legal umbrella. Without this, it is difficult for investors to have certainty, especially in sectors that require large capital and high risk such as upstream oil and gas," said Komaidi.

However, he stressed that there are regulations that do not immediately guarantee technical and business success. The upstream oil and gas sector requires exploration involving high technology, large capital, and mature risk management.

"In theory, good regulations can support technical and business aspects, but in practice it is not necessarily easy to implement," he said.

Komaidi also highlighted the need for more efficient cross-sectoral coordination. The licensing process involving up to 400 permits from 11 ministries is a major obstacle.

According to him, the country's leaders can accelerate this process through direct orders to the relevant coordinating minister.

The upstream oil and gas sector is the main pillar in realizing national energy self-sufficiency. However, to maximize this potential, strong regulations are needed as a legal basis, adequate technical support and a competitive investment climate.

"Without a strong legal umbrella, even trillions of investment could just disappear," said Komaidi.

Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said that one of the manifestations of his commitment to supporting the energy self-sufficiency program through strengthening the national upstream oil and gas sector.

For example, resolving various regulatory barriers that have so far limited the potential of the sector. He emphasized that all regulations that hinder exploration and increased lifting must be cut immediately.

Bahlil also called for the importance of cross-sectoral coordination so that the programs that have been launched by the Prabowo-Gibran government can be carried out properly.

"There is no ministerial vision and mission, the President's vision and mission are there. We must not carry out programs that are contrary to the President's direction," said Bahlil.

The government also prioritizes the management of idle oil and gas wells so that they are immediately operated again through cooperation with cooperation contractors (KKKS).

In addition, the gas produced from 2026-2027 will be directed to domestic consumption by 60-70 percent and support downstreaming and gas-based industrial development such as LPG C3 and C4.

Bahlil also emphasized the strategic role of SKK Migas as an extension of the government's hand in managing the upstream oil and gas sector. He asked SKK Migas to be more accommodating, responsive, and proactive in supporting efforts to increase lifting in the country.

"We must go directly and coordinate with all relevant parties," he said.

He admitted that he was optimistic that the president's big vision regarding self-sufficiency in energy could be achieved through close collaboration between the government, KKKS, and the national private sector.

With this integrated approach, the government sends a strong signal to business actors that the national oil and gas sector is ready to become the backbone of self-sufficiency in Indonesia's energy and economy in the future.

"If we are able to increase lifting, then all parties, including the legislature, will fully support this effort because of its significant impact on the macro economy," said Bahlil.