With an energy crisis becoming a serious threat, IPA Convex 2015 hopes to kick start actions through enhanced collaboration and coordination among relevant parties, including players, central and local governments and legislators.

At least 1,500 participants, most of whom are oil and gas industry players, will take part in the 39th Indonesian Petroleum Association (IPA) Convention and Exhibition 2015 amid tough times facing the energy sector in Indonesia.

The highly crucial event will be held at the Jakarta Convention Center (JCC), Jakarta, from May 20 to 22.

President Joko '€œJokowi'€ Widodo is scheduled to open the event.

The enthusiasm shown by participants remains high despite the downward trend in global oil prices, which has led to most companies introducing cost optimization measures in order to survive the challenges.

Players have reasoned that oil and gas is a long-term business in which the issue of supply and demand is very dynamical in nature.

'€œThey see the future rather than missing an opportunity. Players will increase their exposure while the supporting oil and gas companies will use the opportunity to offer their products so that when the global oil price starts to increase, their businesses will start to roll,'€ said IPA organizing committee chairman Yanto Sianipar in an interview.

Yanto Sianipar - JP/Sudibyo M. Wiradji

Aside from owners of production sharing contracts (PSCs), participants will also include executives from oil and gas supporting companies, central and local government officials, analysts, legislators and students. Several oil and gas companies will also take part in the event, dubbed the biggest in Southeast Asia.

Yanto explained that his year'€™s IPA theme, '€œWorking Together to Accelerate Solutions in Anticipating Indonesia'€™s Energy Crisis'€, was highly relevant to the current challenging situation facing the oil and gas industry.

A focus group discussion (FGD) and a TV talk show on anticipating an energy crisis had been held as part of this year'€™s IPA Convex, given the '€œurgency that all relevant parties, including energy players, government officials [Energy and Mineral Resources Ministry, Upstream Oil and Gas Regulatory Special Task Forces and Investment Coordinating Board] provincial government officials and legislators, should be aware of how to tackle issues hampering oil and gas development.'€

The FGD, held for the first time since the IPA was established, discussed crucial issues that '€œwe will address and we have decided to choose the issue of permit, which has receive a good response from the public. Government officials, legislators and oil and gas players have been engaged in intense discussion on the issue of permits related to the energy business since then,'€ said Yanto, who is also senior vice president of policy, government and public affairs of Chevron Indonesia.

'€œBy discussing the issue earlier, hopefully, the issue will be ready to solve on the day of the convention. So, acceleration of the solution [to the crisis] can be materialized,'€ he added.

Increasingly uncompetitive

The recently held talk show on anticipating an energy crisis in Indonesia reflects how Indonesia'€™s oil and gas industry is severely ailing and how an energy crisis has become a serious threat, with the country predicted to become a gas net importer by 2019.

Quoting a legislator who participated in the talk show on anticipating an energy crisis in Indonesia, Yanto said that the country'€™s severely ailing oil and gas industry had entered the ICU, which meant '€œmore than just ordinary medicines are needed'€.

'€œImproving the investment climate, working together, collaboration, license simplification, etc. were recommended by the IPA five years ago. But this time we cannot wait. That'€™s why we carry the theme, '€˜Anticipating an Energy Crisis'€™.'€

The FGD also disclosed that Indonesia was becoming increasingly uncompetitive when it came to foreign investment as compared to other oil-and-gas-producing countries, partly as a result of the many permit-related requirements that investors had to meet from the exploration phase to the production phase, according to Yanto.

'€œAs revealed in the FGD, 342 licenses are required for the exploration to production phase, which requires between 10 and 15 years. While other countries take only between two and three years.'€

With the theme, he said, the IPA wished to remind the government that '€œwe are now on the brink [of an energy crisis]. Talk is not enough; action is highly needed. Solutions are available, but they have to be accelerated,'€ he said.

The government will play a key role in accelerating the solutions to avert an energy crisis and, according to players, the new government has shown remarkable goodwill in this regard. The formation of an oil and gas reform team headed by Faisal Basri, the appointment and replacements of officials at the Energy and Mineral Resources Ministry and decisions on simplification regarding licenses are among indicators of the government'€™s goodwill that it has shown from the establishment of the new Cabinet and '€œwe want to participate inside it. We will support and help the government'€™s goodwill with collaboration'€.

An example of goodwill, he said, was the intended transfer of authority over permit issuance from the Energy and Mineral Resources Ministry to the Investment Coordinating Board.

The government seems to want to boost certainty regarding regulations on oil and gas projects by enhancing coordination between central and provincial governments, especially in regard to the overlapping of regulations. '€œEach local government department has issued conflicting regulations, such as on spatial planning, land, etc., which hamper the implementation of the projects,'€ he said.

Ephindo joint venture and PGPA manager Moshe Rizal Husin said that issues hampering development of the coal-bed methane(CBM) industry were similar to those facing the conventional oil and gas industry, such as obtaining permits, an overlap of regulations, etc.

However, CBM is a marginal industry in which to find a resource, a company must drill hundreds of wells.

'€œCurrently, the regulations and contract are similar to those imposed on the oil and gas industry, which do not match the industry,'€ he said.

He said that Indonesia had huge CBM reserves and expressed hope that the government would revise regulations and contracts related to the CBM industry in order to facilitate the industry, which is currently at a crossroads. '€œIf the CBM industry can be developed, it can contribute to averting an energy crisis because we have huge reserves,'€ he said.

Besides the convention, the IPA will also feature exhibitions on advanced oil and gas technology, social and capital investment programs and corporate social responsibility (CSR) initiatives by respective companies.