Indonesia's upstream oil and gas regulator has simplified the permit process for oil and gas businesses in three days - Photo by Insider Stories.

JAKARTA (TheInsiderStories) – Indonesia’s upstream oil and gas regulator, known by SKK Migas, has simplified the permit process for oil and gas businesses in three days from 14 days previously by launched the one door service policy (ODSP) on Wednesday (01/15). The fresh move aims to attract more foreign and local investors to the archipelago.

“The government wants to facilitate the licensing process in the oil and gas sector. We hope the program will be able to cut the permitting process which was previously 14 days to three days, from 100 percent to only 20 percent process for that,” the regulator chief Dwi Soetjipto said when launching the program at his office.

The program is expected to support the regulator target to produce oil up to one million barrels per day (bpd) in 2030 from the current 750,000 bpd, among others by ensuring that all upstream oil and gas projects can be completed within the allotted time.

Only 54 out of 126 sediment shelves in the country have been explored, while the remaining 74 sediment shelves have not been explored, he said. Indonesia has large gas potential including those in the Masela block to increase its gas production. The block will be able to increase the liquefied natural gas production by 9.5 million tons per year and piped gas by 150 million cubic feet per day.

Soetjipto explained that the ODSP structure consisted of four working groups namely, land licensing and spatial planning; environment, safety and security; use of resources and infrastructure; and the use of material and resources from abroad.

“The ODSP also simplified the signing authority, such as licensing that requires a letter of the application whose recommendations are usually from the head of SKK Migas, deputies to divisions, then the letter is sufficiently signed by the ODSP chief,” Soetjipto said.

Soetjipto explained through the ODSP, SKK Migas will assist the contractor to be able to fulfill the documents that are required for licensing as well as assisting the licensing arrangement in the relevant agencies.

The reason is until now there is not one exploration or exploitation activity that only requires one permit or involves one agency. In fact, he added, every upstream oil and gas activity requires several permits from various agencies.

“The completion of the project within the allotted time is one effort to keep the project costs in accordance with those that have been agreed to and implemented efficiently. Any delays project will lead to cost escalation and the impact is that state revenue is delayed and not optimal,” he said.

On the same occasion, ODSP team leader Didi Sasono said there are three services in the program including consultation and study, preparation and submission of applications along with the completeness of requirements, and escorting licensing advocacy. The program later can also be connected to online single submission (OSS).

Ego Syahrial, the secretary-general of the energy and mineral resources (EMR) ministry, who joined the launching welcomed OSDP positively. He admitted that licensing issues are still an obstacle in upstream oil and gas investment in the country.

He said until 2015, there were 104 different kinds of permits to obtain if businesses want to participate in Indonesia’s oil and gas sector. In 2016, that number shrank to 42. Recently, the EMR ministry simplified the permit process by further reducing that number to six. The change has been solidified in the ministry’s new regulation number 29 of 2017 pertaining to the law on “Permissions for Oil and Gas Businesses.”

Of the six required permits, companies that want to join Indonesia’s oil and gas sector must obtain permits related to their processes, transportation, commercial activities and data utilization (and how to send it abroad) for oil and gas exploration and exploitation in the country, he ended.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com