Indonesia's Geographical Position is the Reason This Oil and Gas Giant Is Investing Its Capital in Indonesia

Illustration (Photo: Doc. Antara)

NUSA DUA - President of SPA for Asia Pacific Region, ENI Ciro Antonio Pagano said that Indonesia's geographical position is considered very strategic for world energy trade, especially gas and LNG.

In fact, according to him, this factor is the main attraction for global oil and gas companies to invest in Indonesia.

"Geographically, Indonesia is interesting, because it has large oil and gas potential," he said when he was the International Keynote 'IOCs strategic roadmap for investments' at The 4th International Convention on Indonesian Upstream Oil and Gas (ICIUOG) 2023, in Nusa Dua, Bali, Friday, September 22.

Furthermore, he explained, in the midst of geopolitical turmoil which has caused gas supplies from Russia to be withdrawn to European countries, Indonesia has the potential to become a country that has a strategic position to meet world gas needs.

Indonesia's position is strategic because it is surrounded by large buyers such as Japan, Korea and China.

"On the other hand, gas demand in the domestic market is also high, making Indonesia also a potential gas market," he continued.

In fact, ENI is one of the companies that has invested heavily in Indonesia.

ENI's seriousness was demonstrated through the corporate action carried out in July 2023, when the company acquired Chevron's management rights in the Indonesian Deepwater Development (IDD) oil and gas project.

“Last July ENI and Chevron signed the takeover of Kutai Basin. This step is an important step for the development of the IDD project, as well as a major consolidation for the development of the East Kalimantan Gas Field. We will expand exploration in the Kutai Basin and hope to find gas reserves that will be used to support the energy transition. "Because of that, we will continue to invest in Indonesia," he said.

Meanwhile, President Director of Premier Oil Natuna Sea BV and President of the Indonesian Petroleum Association (IPA), Gary Selbie, said that his party also continues to feel the benefits of investing in Indonesia.

One of the reasons is because the government provides many more flexible fiscal incentives for Cooperation Contract Contractors (KKKS).

"So we are extending production from our fields. We are also happy that the government is providing fiscal incentives that give us the opportunity to develop previously marginal fields. "We will sign it this week," he said.

Gery said Harbor Energy would carry out a series of exploration drilling activities in the Andaman region, including appraisal wells which will start next month.

Apart from that, his party will also be in the process of resolving the issue in the Tuna Block, where its Russian partner withdrew.

Even though he feels comfortable investing in Indonesia, Gery hopes that the government can boost oil and gas investment by implementing regulations regarding domestic gas prices.

"Because 50 percent of the gas fields that have not been developed in Indonesia are actually economical to develop in Indonesia," concluded Gery.