Aggressive Pursuing 1 Million Barrels, SKK Migas Targets Exploration Investments Of Up To IDR 45 Trillion This Year

Deputy for Exploration, Development and Management of the SKK Migas Working Area Benny Lubiantara (right) (Photo: Maria Trisnawati/VOI)

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) encourages increased investment in the upstream oil and gas sector.

This step is taken in order to support government programs in the field of energy security.

Deputy for Exploration, Development and Management of the SKK Migas Working Area Benny Lubiantara said that if SKK Migas targets an increase in exploration investment of up to US$3 billion or around Rp45 trillion to be able to optimize the potential of upstream oil and gas which is still promising and its role is increasingly needed because it is not only a source of state revenue but also development capital.

"In the midst of the ongoing transition process, the need for oil and gas energy continues to increase," said Benny in a joint media discussion, Wednesday, May 17.

He continued, according to the General Plan for National Energy (RUEN), the need for oil and gas until 2050 will continue to increase, oil demand increases by 139 percent and gas demand increases by 298 percent.

He added, although the percentage of oil and gas energy mix decreased, the volume increased.

"For this reason, increasing oil and gas production is a necessity and must be supported by the discovery of new oil and gas reserves so that production can be sustainable. Based on the energy transition trend, the growth in gas use will be higher than oil, because gas is relatively clean and accepted in the transition energy era," explained Benny.

Benny said, to achieve the national oil and gas production increase target in 2030, namely oil 1 million barrels per day (BOPD) and gas 12 billion cubic feet per day (BSCFD), the backbone is exploration because production must be replaced with new discoveries.

"Therefore, exploration investment is very important," added Benny. Benny said that in an effort to increase exploration investment, one of the references from investors is how competitiveness between countries is related to upstream oil and gas investment.

Based on data from Wood Macson, Indonesia's protection and attractiveness is at an intermediate level.

At the country's level around the region, Indonesia's position is better than Thailand and Brunei, but still lower than Vietnam, Malaysia and Australia.

The last 15 major discoveries have occurred in countries that offer simple upstream oil and gas fiscal regimes and attract investors, including Brazil, Guyana, Suriname, Mozambique.

The government is currently increasing investment competitiveness upstream oil and gas, this effort can be seen with the increasing interest in investment in the exploration sector. For 2023, the upstream oil and gas investment plan reached US$1.7 billion, an increase of around 112 percent and was recorded as the highest exploration investment since 2015," said Benny.

According to Benny, if in 2023 the number of exploration wells drilling is targeted at 57 wells, then by 2024 it is estimated that it will increase to 97 wells and 2025 and so on, it is targeted to be above 100 wells.

"To realize this target, large exploration investments of up to around US$3 billion or equivalent to Rp45 trillion are needed. As an industry that has a high risk and takes a long time since exploration until it can be produced, the upstream oil and gas investment climate must be properly maintained, not only attractive but also provides legal certainty," concluded Benny.