JAKARTA - Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia emphasized that the national oil and gas lifting target of one million barrels per day in 2030 can no longer be achieved in conventional ways. Therefore, innovative steps are needed beyond custom so that the target is truly fulfilled.
"We from the Ministry of Energy and Mineral Resources are forced to do things that are out of the way. Because if things are normal, it feels like our lifting will be like that," said Bahlil, quoted on Friday, May 23.
To boost oil and gas lifting, the Ministry of Energy and Mineral Resources established three main strategic pillars. First, optimization of production with the application of cutting-edge technology, including the Enhanced Oil Recovery (EOR) method and the transition of vertical drilling techniques to horizontal. This breakthrough has proven to be able to increase the acquisition of oil from existing reserves.
Second, the reactivation of oil and gas wells that have been idle (inactive) for a long time to maximize field production which has been underdeveloped. Third, intensive exploration of oil and gas basins that have not been worked on. Of the 128 basins throughout Indonesia, 68 of them still have great potential that has not been utilized.
In order to accelerate exploration activities, Bahlil announced plans to auction 60 new oil and gas areas (WK) until 2028. This tender is expected to open new investment doors while strengthening national energy reserves.
"We will tender it within the next 2-3 years. At the direction of the President, we ask for directions if we can do it quickly, we will do it," said Bahlil.
On the other hand, the Government has prepared various incentives to attract investor interest, including an increase in oil and gas yield sharing to contractors of up to 50 percent and an increase in the Eternal Rate of Return (IRR) of the upstream oil and gas project to around 15-17 percent.
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"We provide an economical sweet energy formulation. So the state's target can be increased in lifting, but the Cooperation Contract Contractors (KKKS) also do not lose. But the state must also make a profit, so we arrange win-win (solutions)," Bahlil explained.
As proof of commitment, the profit-sharing contract for three WKs from phase II of the 2024 auction, namely WK Kojo, WK Binaiya, and WK Serpang has been signed before the President of the Republic of Indonesia Prabowo Subianto. The promised investment value reached 13.3 million US dollars, with a total signature bonus of 700,000 US dollars. The three WKs are exploration areas with a contract period of 30 years using a cost recovery scheme.
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