IPA Convention to Assess Indonesia's Oil and Gas Competitiveness

The government expects investments in the oil and gas industry to reach $12.6 billion this year, of which only $810,000 will go for exploration. (Reuters Photo/Beawiharta)

By : Adinda Normala | on 10:18 PM March 07, 2018
Category : Business

Jakarta. The Indonesian Petroleum Association, or IPA, will discuss ways to improve Indonesia's competitiveness in the international oil and gas industry at an exhibition in Jakarta on May 2-4.

The IPA Convention and Exhibition is organized annually by the organization, which comprises of oil and gas companies in Indonesia, to share technical knowledge and facilitate dialogue between the industry and the government.

Indonesia, a former OPEC member, was once self-sufficient in oil and gas, but years of underinvestment undermined its position and made it dependent on oil imports.

According to IPA director Ignatius Tenny Wibowo, the oil and gas industry applauds efforts by the Ministry of Energy and Mineral Resources, which has dropped 18 regulations and revised production sharing deals, as a step in the right direction.

However, there are still overlapping regulations in other ministries — regarding taxation, environmental impact assessment (Amdal), for example. Regional bureaucracy, too, often inhibits development.

"It's not within our expertise to deal with regulations ... If they are simplified, we can offer technical advice for discovering [new oil and gas fields]," Tenny said during a media visit to Berita Satu in Jakarta on Wednesday (07/03).

Neighboring countries, he added, also offer deregulation and incentives to compete for foreign investment.

For the convention, IPA will invite industry leaders, policy makers and experts in the oil and gas sector. Sessions will be themed "Mapping Global Oil and Gas Investment Competitiveness," "How Countries Maintain and Improve Their Global Oil and Gas Investment," "Aligning Policies to Achieve Indonesia's Energy Plan" and "Improving Indonesia's Gas Business From Upstream to Downstream."

Indonesia's crude oil output reached around 1.7 million barrels per day in the mid-1990s, but with just a few oil fields discovered in the western part of the country, production has dropped by half in the past decade.

The government expects investments in the industry to reach $12.6 billion this year, of which only $810,000 will go for exploration.

In 2017, the investment was $9.33 billion, significantly less than the $12.3 billion target, with $180 million spent on exploration.

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