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IPA Launches “White Paper”, Increasing Collaboration with the Government to Pursue Oil and Gas Production Targets
JAKARTA - Business actors in the upstream oil and gas sector in the Indonesia Petroleum Association (IPA) are committed to increasing collaboration with the Government to achieve a common goal of meeting national energy needs. Yuzaini Md Yusof, President of IPA, said the increase in upstream oil and gas investment realization achieved in the first semester of 2023 was a sign that enthusiasm to invest in Indonesia was heading in a better direction.
“In the first half of 2023, investment in upstream oil and gas reached USD 5.7 billion, the target is to exceed USD 15 billion. This investment is important for Indonesia to meet its increasing energy needs,” Yuzaini said at the IPA Convex 2023 press conference at ICE BSD, Tangerang, Tuesday (25/7).
According to him, this trend of increasing investment must be maintained to achieve the oil production target of 1 million barrels per day and 12 thousand MMscfd of gas. The energy transition to New and Renewable Energy (NRE) will not immediately eliminate the use of oil and gas. “We know the world is moving towards NRE. Indonesia has a commitment to Net Zero Emissions by 2060. This transformation is not instantaneous, there needs to be a transition, we cannot just jump to NRE. Thus, the role of the upstream oil and gas industry is important, as we, the upstream industry, continue to reduce carbon emissions as stated in the CCS/CCUS rules,” explained Yuzaini.
The CCS/CCUS program is one of the development focuses of the government and business actors. Thus far, the government has initiated 15 CCS/CCUS projects. According to Yuzaini, the government must be persistent so that a CCS/CCUS pilot project is fully implemented. “At least one project must run optimally, so it can show us (the business actors) that this project can be implemented,” he said.
The 2023 IPA Convention and Exhibition (Convex) has the right momentum given the current condition of the upstream oil and gas industry. IPA submitted a “White Paper” containing recommendations and suggestions for increasing investment enthusiasm to pursue oil and gas production targets during the energy transition era.
This IPA recommendation was prepared in collaboration with WoodMeckenzie, involving all stakeholders. Two of the main points in this recommendation are to look for opportunities to increase investment and also about CCS/CCUS in Indonesia. In addition, efforts to increase oil and gas production must also comply with environmental sustainability.
Marjolijn Wajong, IPA Executive Director, explained that business actors are now facing a target of increasing production and, on the other hand, the oil and gas industry must also reduce emissions. To be able to pursue both, business actors need flexibility.
“Firstly, we propose flexibility, supported by the Oil and Gas Law, that the Government makes efforts to be more competitive. So that terms and contracts provide flexibility,” said Marjolijn.
Apart from that, IPA, she continued, guarantees that the implementation of CCS/CCUS has more benefits than just reducing emissions and increasing production. “CCS/CCUS is seen as a business opportunity and with new businesses there is a multiplier effect. We also implore the government to see that CCS/CCUS can be carried out in open areas. Decide on a good business model,” she said.
Krisnhna Ismaputra, Chairman of the IPA Convex 2023 Committee, said the important issues in the White Paper, including the implementation of CCS and CCUS, were some of the focus points of discussion this year. “This can be carried out by looking for opportunities to increase investment and, regarding CCS/CCUS, it is also hoped that this Convex IPA will bring a momentum in its development,” he said. (*)