T

he 37th Indonesian Petroleum Association Convention and Exhbition brought together the major names of the industry in Indonesia, and also from overseas. In looking ahead to improving conditions for the sector in the future, The Jakarta Post asked the opinions of several corporate and government representatives at the INPEX. Here are some of their views on what needs to be done for advancement.

Kristanto Hartadi

Head of media relations
TOTAL E&P INDONESIE

In all aspects, IPA's event this time was the biggest ' an achievement in itself ' based on the number of participants, numerous presentations and programs and also the available exhibition booths.

In view of the participants' enthusiasm and the promise given by the President about incentives and faster permit processing for the upstream oil and gas industry, this is indeed a major plus for the IPA's 37th Exhibition and Convention.

Currently it is difficult for us to boost oil and gas reserves if exploration is not increased, while the exploration challenges in Indonesia are getting tougher and are in remote areas or deep offshore areas that require larger investment, better technology and expertise.

Another challenge is the legal uncertainties in Indonesia, causing much concern and making us all more worried.

Sutito Zainudin

General manager, marketing
PT Sky Aviation

PT Sky Aviation's participation in this event is based on the request of our clients, who are mostly foreign oil companies that happen to participate as well. One is a foreign oil company that runs offshore fields in Natuna, Riau Islands.

Many visitors are surprised by an aviation company such as ours participating in this event. What's the connection? Several oil companies have assigned Sky Aviation to fly their employees to exploration fields, such as Titan Oil [Mitra Energy]and Black Platinum [North Sokang].

At that time, we used Fokker 50 twin turboprop aircraft from Halim Perdanakusuma International Airport in East Jakarta. And now we are bidding for assignments from Premier Oil and marketing our services to some other foreign oil companies. It is highly possible that through the IPA exhibition, many domestic and foreign oil companies will become more aware of Sky Aviation.

Marjolijn

President and general manager Santos Indonesia

Major obstructions are faced by most oil companies nowadays during exploration. The increased rate of investment in 2013 compared to last year shows that Indonesia is still attractive for investors. For the past few years, the realization of oil drilling has been below 50 percent and this year there are 250 oil wells in process.

However the realization is estimated at less than half of what it could be, because, at the implementation level, industry players have to face complexities from multiple departments, as well as technical and social challenges, along with a minimum comprehension of the industry itself.

It seems that we are not sticking to our planned commitments, which should get the proper attention of the policy makers. Exploration areas are usually brand new areas with high risks that require costly equipment.

They are in remote areas having insufficient infrastructure. The spatial layout is another major problem due to overlapping regulations and authorities.

Rudi Rubiandini

Head of SKKMigas

An attractive revenue sharing (split) given to production sharing contractors (PSC) is the most feasible form of incentive to boost investment in oil and gas. And a change in the pattern of the split related to the upstream oil and gas sector is the easiest form of incentive to be realized. This is because Indonesia is on the list of five countries that are the major recipients of upstream oil and gas activities.

The government should be willing to sacrifice by lowering the percentage of its share from upstream oil and gas activities. It may not be good in the short term but this will favor Indonesia in the long term. With a pattern of the split that gives a bigger percentage to contractors, investors will eye the national oil and gas potential.

Currently, investors are not interested in investing in the oil and gas sector because the scarce oil and gas reserves are accompanied by a less than attractive regulation on the split.

The oil and gas industry should no longer be seen as sector that boosts state revenue but the one that can enhance competitive edge of the national oil and gas industry and give a sustainable effect on other kinds of industries.

Mohammed Hamad Al Rumhy

Oman's Oil and Gas Minister

I think consistency in policy and regulation is a key to ensuring security for investors. There are more than 10 companies operating in Oman and there are more than 20 big oil reserves. We have yet to change the policy for the last 10 and 15 years. Technology has been adopted seriously for the sake of stable and environmentally-friendly production growth.

For the government, it is important to establish a good relationship with community living in the operation site. The company can assist in empowering them but they should give them an opportunity to build themselves because they know best what they really need.