The energy and mineral resources (EMR) ministry targeting the new investment in the oil and gas sector to rises around 45 percent from US$12.1 billion to $17.6 billion in this year - Photo by the EMR Ministry Office

JAKARTA (TheInsiderStories) – The energy and mineral resources (EMR) ministry targeting the new investment in the oil and gas sector to rises around 45 percent from US$12.1 billion to $17.6 billion in this year, said the official on Monday (01/18). The investment consists of two sub-sectors, upstream projects worth of $12.38 billion and downstream project $5.2 billion.

Tutuka Ariadji, the director general at the ministry, explained, in this year, the government targeting the oil lifting 705,000 barrels per day (bpd), lower than previous year about 707,000 bpd. While, the gas lifting is targeted 1 million barrels of oil equivalent per day (BOEPD), higher than last year’ achievement of 975,000 BOEPD. Indonesian crude oil price  also rises from $40.39 per barrel in 2020 to around $45 a barrel in this year.

EMR minister, Arifin Tasrif, has announced that investment in the energy sector (including mineral, coal, oil and gas) recorded $24.4 billion in 2020 or decreased compared to a year ago worth of $33.2 billion. For oil and gas, the realization of investment was $12.1 billion, slightly lower than 2019 was $12.9 billion. This year the investment is projected around $17.6 billion.

To support the targets, the government will offer a number of incentives will be given such as tax holidays, investment credit, tax facilities. Tasrif said, Indonesia will auction around 68 unexplored offshore oil and gas basins starting next year to attract new investment in these sector, said the minister in one seminar.

The country’ reserves recorded 3.77 billion barrels of crude oil and 77 trillion cubic feet of natural gas. He explained that the government has targets to represent 24 percent of its energy mix by 2050 and completing master plans for six refineries. He expect with this programs will increase the processing capacity of crude oil from 1 million bpd to 1.9 million bpd.

He adds, Indonesia would also expand its gas pipeline infrastructure to meet the domestic demand for power plants and supply the electricity to remote islands in the region. Last year, Indonesian government offered 10 oil and gas working areas in. The projects include direct offers for five working areas and others in regular auctions.

According to acting director general at the ministry, Ego Syahrial, the 10 oil and gas working areas are spread across Kalimantan, Java and Papua Island. In details, five direct offering are Merangin III (onshore), Sekayu (onshore), North Kangean (offshore), Cendrawasih VIII (offshore), Mamberamo (onshore and offshore) with potential 1,203.69 Million Barrels of Oil (MMBO) and 586.9 billion cubic feet (Bcf).

Through a regular auction with potential 2,232.75 MMBO and 4,420 Bcf are West Palmerah (onshore), Wangkas (offshore), Liman (Onshore), Bose (onshore and offshore), and Maratua working areas (onshore and offshore). To improve the upstream oil and gas investment climate, said Syahrial, the ministry has issued EMR Ministerial Decree Number 12 of 2020 concerning gross split for the Production Sharing Contracts.

For new working areas being auctioned, as well as those that will expire, the option is to be able to use the form of PSC with the cost recovery or gross split mechanism or other forms of cooperation contracts. As of July 2020, he revealed, the exploration status of 99 working areas, consisting of 73 conventional and 26 non-conventional working areas. 81 of the contract use cost recovery revenue sharing and 18 working areas using gross split revenue sharing contracts.

US$1: Rp14,100

Written by Editorial Staff, Email: theinsiderstories@gmail.com