Undistributed, Potentially Disadvantaged Countries From WK Senggal Gas Production

Illustration (Photo: Doc. Antara)

JAKARTA - Deputy of Finance and Commercialization of SKK Migas Kurnia Chairi revealed that the state has the potential to lose acceptance of the Sekang WK gas lifting.

At this time, gas production from the Field cannot be distributed to electricity because there is disagreement between PLN and the power generation company (IPP), in this case PT Energy Sengkang.

"The loss of production at WK Sekang since September 12, 2022 will have a negative impact on efforts to achieve the gas lifting target in the 2022 State Budget and the loss of state revenue," he said in a statement to the media, Monday, December 19.

He added that until now, there is no certainty when the gas of 40 million cubic feet per day (MMSCFD) will be used again to meet the needs of the electricity sector in South Sulawesi, especially Wajo Regency where the Sengkang WK is operating.

"The impact of not distributing gas production in WK Sekang does not only result in the potential for gas production being restrained, but also the state no longer gets acceptance from the sale of the gas. More than that, we are worried that the Government's hard work to encourage increased upstream oil and gas investment will be hampered," he continued.

Kurnia added that the government's policy of taking sides in the electricity sector at low gas prices should be used as well as possible to support the provision of relatively clean energy in order to improve the Indonesian economy in the current energy transition era.

He continued, SKK Migas and Cooperation Contract Contract Contractors (KKKS) fully support the Government's policy so that gas is prioritized to meet domestic needs.

"Therefore, we hope that buyers, including PLN, will implement the policies set by the Government," he added.

He added, amid the high world gas price and supply constraints due to the Russian war "Ukraine", actually selling gas in international markets is very profitable and provides foreign exchange for the country.

"However, we emphasize that SKK Migas and KKKS fully support the Government's policy so that gas production is prioritized for domestic purposes. We hope that other parties, especially gas buyers, will realize their commitments and participate in implementing government policies," said Kurnia.

For this reason, he asked the disputed parties to immediately resolve the problem so that the gas from WK Sekang can be immediately channeled and resold in order to meet the lifting target and optimize state revenues and maintain the upstream oil and gas investment climate so that it remains conducive.

"The need for oil and gas in the future is getting bigger as stipulated in the National Energy General Plan (RUEN). SKK Migas and KKKS have formulated plans and strategies for Indonesia Oil and Gas 4.0 in order to support the provision of oil and gas energy which continues to increase with the target in 2030 oil production reaching 1 million barrels per day (BOPD) and gas 12 billion cubic feet per day (BSCFD), with investment needs up to 2030 of around 179 billion US dollars," concluded Kurnia.