D

espite falling oil production and sluggish exploration activities, the Energy and Mineral Resources Ministry is still upbeat that reestablishing Indonesia’s energy independence is possible.

The director general for oil and gas at the ministry, Evita Herawati Legowo, said the government had prepared four strategies as the pathways to end the country’s dependence on imported energy.

The strategies were increasing exploration and production activities, improving energy-related infrastructure, developing unconventional oil and gas and setting reliable and affordable prices, she
elaborated.

“For infrastructure, we need to build more refineries, gas receiving terminals, pipeline networks and other necessary facilities to promote the utilization of gas for transportation vehicles,” Evita said.

In addition to intensifying explorations and improving infrastructure, the first plenary session also addressed the importance of government attention on subsidies and developing renewable and alternative energy.

ReforMiner Institute executive director Pri Agung Rakhmanto urged the government to manage fuel subsidies and provide incentives for the developing renewable and alternative energy.

“We’ve been spending too much money subsidizing fuel. The government should have the courage
to reduce subsidies. It has to address the subsidy issues rationally not
politically,” he said at the plenary session.

Commenting on the strategies prepared by the government to reestablish the country’s energy independence, Pri Agung suggested that it materialize all the plans into regulatory framework so the implementation would be more certain.

Vice President Boediono said at the opening ceremony of the event on Wednesday that the future of Indonesia’s energy security relied on its natural gas production, since oil prices were predicted to continuously soar while the production had shown no encouraging progress.

Upstream oil and gas regulator BPMigas head R. Priyono revealed that his agency was currently preparing an incentive scheme to promote the development of small and marginal gas fields in a bid to boost the country’s gas production.

He claimed that supplies from small and marginal gas fields would be crucial for domestic gas-users, since productions from major fields were mostly exported for higher profit margin.

“We’re formulating an incentive scheme to encourage the development of small and marginal gas fields,” he said at the second plenary session.

However, Priyono did not elaborate on what kind of incentives the government might provide.

He also emphasized that, to ramp up gas supply in the future, it was necessary to boost explorations in the eastern part of the country, since the area was projected to have abundant gas resources.

The Energy and Mineral Resources Ministry will offer 20 new oil and gas blocks on Friday at the closing of the convention and conference.

As many as nine blocks — Bulu Rembang, offshore Timor sea I, offshore Timor sea II, Halmahera I, II, III, West Aru I, II and Arafura sea II — will be offered through conventional bidding.

The remaining 11 blocks which include Ranau, Northeast Madura, Belayan, East Simenggaris, North Ganal, Babar Selaru, Obi, North Semai, West Berau and Semai IV and will be offered to directly potential investors.