Oil and gas firms optimistic about increased investment
The oil and gas industry is optimistic about the future of reform in the Indonesian energy sector through using comprehensive dialogue to tackle investment challenges. This approach is expected to boost exploration activities.
“The Indonesian oil and gas industry needs to conduct more exploration and develop further reserves of oil and gas in the frontier areas to meet growing domestic demand and also increase revenues from exports,” said the Indonesia Petroleum Association (IPA) president Elisabeth Proust at the closing ceremony of the 36th IPA Annual Convention and Exhibition (Convex) in Jakarta last week.
At the IPA convention, oil and gas companies emphasized their readiness to invest and this was indicated by their commitment to support the Indonesian government in achieving the target set for the oil production, said Proust.
She said that according to the data available at the Energy and Mineral Resources Ministry, the oil and gas sector was one of the main contributors to Indonesia’s economy with a contribution of US$35 billion, or about 21 percent of the 2011 state revenues.
Direct investment in the industry was over $16 billion last year, with direct employment of over 300,000 Indonesian workers and indirect employment for countless more.
“And through its extensive corporate social responsibility [CSR] investments, the oil and gas industry is committed to developing Indonesian communities,” she noted.
She expected increased investment in Indonesia coming from both domestic and foreign investors. The investors could have a first look at the investment opportunities at the annual Convex event held by the IPA.
Meanwhile, the chairman and president director of Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) Refinacion SA, Roberto Cuadros Arenas, said that the Bolivian government offered Pertamina and other Indonesian investors the chance to manage a number of oil and gas blocks in the South American nation.
Currently Bolivia has 15 tested oil and gas fields which are divided into five super large oil and gas blocks. In addition there are another 49 oil and gas blocks that are in the exploration stage. Arenas’ company wants oil and gas companies in Indonesia, especially Pertamina to be aware of the potential benefits of investing in Bolivia.
“We want to build special collaboration with Pertamina. Bolivia views Pertamina as a reliable institution. YPFB has specially come to Pertamina to build an investment relationship,” said Arenas during the press meeting at Convex.
He said his company was particularly interested in building collaboration with Pertamina for exploration and production in Bolivia.
“Our participation in the 36th annual IPA event in Jakarta this time is to attract investors to Bolivia and invite Indonesian investors, both individuals and companies, to invest in our country. We also wish to build a relationship with the oil and gas regulators in Indonesia, such as the Directorate General of Oil and Gas and BPMigas,” he said.
He explained that investment contracts in Bolivia were 40 years in duration and highly secure, with a commensurate level of legal certainty. “Bolivia already has large and nearby markets for its oil and gas products, namely Brazil and Argentina,” he said.
About 150 companies participated in the Convex and over 8,000 visitors attended, including convention delegates, professionals and university students. There were 150 technical papers presented on sophisticated technology in the industry, as well the opportunity for the exchange of knowledge between professionals and university students.
IPA gave awards for the best paper, the best exhibition stand as well as to the winners of amateur photography contests, all of which were announced at the closing ceremony.
This convention was an important milestone for IPA not only due to a record-breaking number of participants, but also because of the discussion of important issues.
The Empowerment Center (EC) was the newest activity center at the convention this year, and showcased efforts of oil and gas companies to preserve the environment and to benefit surrounding communities. There were more than 1,200 visitors to the EC, including Energy and Mineral Resources Minister Jero Wacik.
Meanwhile, Director General of Oil and Gas Evita H Legowo said the government had given a positive signal on the review of regulations in the energy sector by requesting input from all stakeholders.
“The government will continue to provide incentives for the oil and gas industry by providing laws and regulations conducive to the investment climate, and by issuing policies that will boost the growth of investment in this sector, which is required for future development of the industry,” she said.