IEA Chief Economist Laszlo Varro said that a stable democracy and century-long experience in the oil and gas sector bring benefits to the country’s upstream oil and gas industry as it attracts foreign companies for investment.
However, he said that the future investment in upstream oil and gas will be increasingly limited as the world is currently shifting to the use of renewable energy.
“There will be industry players who will not get the opportunity because the competition to attract investment will be very tight,” Laszlo said in a virtual event titled 2020 International Convention on Indonesian Upstream Oil and Gas (IOG 2020).
He went on to say that there are potential areas that can be explored by the Indonesian oil and gas sector. This includes the development of an enhanced oil recovery (EOR) project and utilizing carbon dioxide or CO2 gas.
Meanwhile, in the field of liquefied natural gas (LNG), Indonesia has great potential to develop mini LNG refinery facilities to meet its domestic industrial gas.
Still in the same event, Coordinating Economic Affairs Minister Airlangga Hartarto said that the upstream oil and gas industry remains important in contributing to the national economy.
Annually, it receives an investment of nearly $10 billion, with a multiplier effect factor of 1.6 times.
“The government is aware that the upstream oil and gas industry plays a strategic role to support economic growth programs, the industry is not only a source of revenue but also a locomotive for economic development,” Airlangga said.
Kompas.com previously reported that Indonesia has set a target of achieving the national production target of one million barrels per day (bpd) and 12 billion cubic feet of gas per day (bscfd) by 2030.
In the third quarter of 2020, Indonesia recorded a decline in the realization of oil and gas production and lifting due to the Covid-19 pandemic.
The realization of oil production reached 710,000 barrels per day (bpd). Even though it was equivalent to 100.4 percent of the work program and budget target, the realization was down 4.71 percent from 745,100 bpd in the same period last year.
Meanwhile, the realization of oil lifting until the third quarter reached 706,200 bpd, or down 5.37 percent from 746,300 bpd last year. The difference between the production and lifting was because contractors (K3S) have stored the oil amid the low price of crude oil.
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