JP/Sudibyo M.WIradji

The 39th Indonesian Petroleum Association (IPA) Convention and Exhibition ended on May 22, with the government'€™s decision to transfer its 42 oil and gas permitting processes from the Energy and Mineral Resources Ministry to the Investment Coordinating Board (BKPM) of particular note. Participants and visitors share their views of the event on this page.

Yanto Sianipar
Chevron IndoAsia Business Unit, Jakarta

Overall, this year'€™s convention and exhibition has been very successful. In terms of participation, we achieved a new record of visitors, close to 25,000 people. More importantly, all panel sessions discussed critical things for the future improvement of the oil and gas investment climate. We saw the commitment of the government to find breakthroughs in the future.   

It is worth noting that the Energy and Mineral Resources Ministry has transferred its 42 oil and gas permitting processes to the BKPM under PTSP (One Stop Integrated Services). Also, we witnessed 12 new production sharing contract (PSC) signings and five gas sales agreements on the last day of the event.

JP/Sudibyo M.WIradji

Some important recommendations that we noted:

- Start using the one-door service permitting system at the BKPM. The IPA is expected to give input on its
  implementation.

- Evaluate overlapping and conflicting regulations. This will help improve the effectiveness of the approval process
  and give clarity to the authorities in giving approval.

- Address the effectiveness of the bureaucracy in managing approval and permits.

- Establish the scope and governance of the National Exploration Commitee.  

The Komite Eksplorasi Nasional is a promising initiative from the government. We expect that the committee will evaluate all past issues and recommendations that have been listed in the past both for technical and non-technical matters. The execution of those recommendations is the problem. I believe this committee will focus on the prioritization and execution of them so we will see more exploration activities in Indonesia.

Judging from government officials attendance at this event, we saw a lot of optimism for oil and gas and the governments actions. This is also shown from surveys and the investment climate in Indonesia is still attractive.

The commitment of Coordinating Maritime Affairs Minister Indroyono Soesilo, Energy and Mineral Resources Minister Sudirman Said and Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) head Amien Sunaryadi to attend the event almost every day was encouraging. It showed their intent in collaborating with industry players.

Moshe Rizal Husin
Joint Venture and PGPA Manager
Ephindo Energy Private Ltd.

Courtesy of Moshe

With more than 2,700 convention delegates, over 250 exhibitors and over 20,000 visitors, I think this IPA has achieved beyond our expectations, in light of the current global industry crisis due to the low oil price.

We have seen great participation from all stakeholders in all dialogue sessions, with a lot of enthusiasm in discussing solutions and how to accelerate them.

What we could see clearly was optimism from investors and players in our oil and gas industry in Indonesia. Despite the industry slowdown, where all major operators, supporting companies and investors are restructuring their businesses and cutting costs, I believe the optimism we saw showed they were thinking beyond short-term goals. They were adopting a '€œget ready when things get better'€ approach and were trying to evaluate the advantages of lower operational costs.

We could also see that the government, represented by Pak Indroyono, Pak Sudirman, Energy and Mineral Resources Ministry director general for oil and gas IGN Wiratmadja and Pak Amien showed their willingness to listen to the industry'€™s challenges and openness to all input to craft the right actions to be implemented.

We organized dialogue sessions based on special requests from SKKMigas and the Energy and Mineral Resources Ministry, such as sharing sessions on '€œSustainability Reporting in the Oil and Gas Industry'€ by SKKMigas on the second day, '€œDialogue with the Energy and Mineral Resources Minister'€ on the third day and questionnaires for audience members, with the result being delivered by Pak Amien at the close of the event.

Most important of all, almost everyone agreed that Indonesia was on the verge of an energy crisis and real actions needed to be taken.

We send our appreciation to the new government in taking real steps to reduce permits and support a one-door policy. The tasks ahead that are equally important are to reduce bureaucracy and decision making related to the upstream oil and gas industry from all government institutions, including the Energy and Mineral Resources Ministry and local government.

We, the industry players, would like to be more involved during the drafting and implementation of related policies and regulations issued by the government. We need the government to facilitate that approach to avoid the negative impacts of some new regulations on Indonesia'€™s investment climate and our operations (example regulations are cost recovery, letters of credit, value added tax and the use of the rupiah).

We also need to see the government actively considering increasing and incentivizing exploration, especially in marginal businesses, due to high costs and in unconventional resources, such as shale hydrocarbon and coal bed methane.

We are happy to see the proactive approach of the new government by forming this committee and we are ready to be a part of it, but as I said we need to see real action on the ground.

Our enthusiasm is very high. We have seen Pak Sudirman and Pak Amien opening their ears and minds to our input, realizing the crisis ahead and taking the necessary steps to gain investor confidence, such as cutting permits, streamlining the bureaucracy and helping to resolve issues faced by industry players in recent months. But so much still needs to be done to get Indonesia out of an imminent energy crisis. Some believe that we are already in a crisis.

Komaidi Notonegoro
Researcher
ReforMiner Institute

Courtesy of Komaidi Notonegoro

I think players at the Indonesian Petroleum Association Convention and Exhibition (IPA Convex) need to convey concrete things when it comes to the assistance they seek from the government. They should identify problems that hinder them in the field. For example, in regard to land clearance they have to disclose detailed and concrete information on the problems, such as over land compensation, the technical approaches they use and solutions they propose for problems, instead of just disclosing issues in general. Each company should show its own documents on the real obstacles or problems that they have identified in the field to the government.

I know that it'€™s not easy to solve the issue of overlapping and conflicting regulations, especially because each region has its own interests and targets since the implementation of the regional autonomy law in 1999. To avert these, harmonization of regulations is crucial.

 The important thing is to enhance coordination between central and local governments and also among units under the Energy and Mineral Resources Ministry.

 After the IPA Convex, I think it is time for oil and gas industry players to optimize their efforts to boost output and also develop non-oil and gas energy, with the government acting as a facilitator.

 With potential oil and gas reserves, mostly in Indonesia'€™s eastern regions and under the deep water, it would advisable for the government to provide better incentives for investors given the tougher challenges they have to face and higher amount of funds they have to invest in order to attract investors.

Santos

The Indonesian Petroleum Association (IPA) Convention and Exhibition this year was a success despite the fact that the global oil and gas industry is facing a crisis due to the fall of the oil price. The successful IPA event proves the Indonesian oil and gas industry has joined hands to anticipate an energy crisis in the country. The event saw several recommendations issued to facilitate the country'€™s oil and gas performance to enhance production and exploration.

Governance reform in the oil and gas sector, particularly in permit processing, aims to encourage the flow of investment into Indonesia.

Providing breakthroughs to enhance the oil and gas sector in governance reform and cross-sectoral collaboration in the form of new policies and new rules, especially in exploration permits and so forth, will bring certainty to investors which, in turn, will actively encourage oil and gas exploration needed by Indonesia.  

Despite the current condition in oil and gas industry, the public interest to participate in the convention and visit the exhibition remained high this year. We saw more visitors in every zone of the exhibition, including the Community Empowerment Zone. The theme was also bold as it was about anticipating the energy crisis, which we are going to face sooner or later.

INPEX

We highlight our commitment to supporting the government in managing oil and gas activities in Indonesia. Our current focus is to develop the Abadi field, this development project is a vital project that will help the energy needs in the future and provide a multiplier effect for businesses in general, government and society.

The Abadi Gas Field is located in the Marsela Block of the Arafura Sea in Eastern Indonesia, near the Indonesia '€“ Australia borderline. We have huge gas reserves which will be beneficial for Indonesia. The development concept of the Abadi Field will utilize sub-sea production system and floating LNG facilities.

Through this event we expect to get a maximum support from all strategic stakeholders, including the government, communities, and institutions associated with the Abadi project activity, thus gaining support in determining its business plan, carried out in accordance with the needs of the project and implemented in accordance with the agreed schedule.

JP/Wendra Ajistyatama

Sri Kumaryati
Bank Mandiri retiree

I am attending this event because I want to accompany my son and husband. I used to work for Bank Mandiri before I retired. My sons and husband have backgrounds in geology and oil engineering, so this exhibition is very relevant for them as well.

My youngest son, who just graduated with a degree in geology from the Bandung Technology Institute (ITB), is now looking for a job so he is pleased to find some oil and gas companies that have interesting job vacancies. He can simply drop his application off at the booths of the companies he is interested in.

My husband also made good use of his time at the exhibition by visiting the booths of companies that sell heavy equipment that is useful for his work at an oil company.

I think exhibitions like this are also very useful for school and university students. I remember when I was a high school student my teacher gave me an assignment to write a paper about the oil industry. Because I did not have sufficient knowledge about the industry at that time and nobody to consult regarding the topic, I decided to visit an exhibition of this kind which luckily was held around the time I wrote my paper. Needless to say, I was able to write a decent paper thanks to that exhibition.

Agus Haryanto
Petroleum engineer

I am working in the petroleum engineering field and so need to understand the most recent developments in that field. The thing that I am most curious about is the development of software related to the oil industry, which is very important to make our work more efficient in the digital age.

I am also interested in the future of Indonesia'€™s diesel production. Actually, Indonesia does not need to import diesel because the country has a natural gas reserve that can last for 50 years. However, our oil reserve can only last the next 10 years or so. There are not a lot of new oil fields that have been discovered in Indonesia recently, the last one was the one in Banyu Urip in the Cepu block in East Java.

I am wondering why Indonesia has not become a diesel developer despite the abundant gas reserve.

Dwi
Communication studies student

I am here because I need to complete my college assignment about corporate social responsibility (CSR) programs funded by different industry sectors. I happened to get the oil and gas sector as the focus of my assignment and luckily, around the same time, this exhibition was conducted.

For my assignment, I need to collect information on which oil and gas companies conduct CSR projects as well as the details of how the programs are implemented. Knowledge of this is very important considering that the oil and gas industry has the most adverse environmental impacts.

I hope next year the exhibition will open more booths in its CSR section so that both industry players and the broader public are able to get comprehensive information on the topic.

Budi Rahman
Seismic survey consultant

Basically, I am motivated to attend this exhibition because I know many people from the oil and gas industry, particularly people from Activo Global, so I want to meet them here. I know them because I am working for a consultancy company that helps oil and gas companies conduct seismic surveys as well as environmental and social mapping in their operation areas. So my company helps our clients to assess the impacts of their operation on the local community by taking samples of sea water and air before and after seismic surveys, explorations and exploitations.

This exhibition is very useful for me to form new business connections and explore different opportunities within this field.

Tanto
Oil and gas industry consultant

I come here to form new business connections and make new acquaintances from the oil and gas sector as well as industries that are relevant to it, which is very important for me as a consultant. After the exhibition ends, usually I will maintain a more intensive communication with my new acquaintances and explore possibilities of cooperation between us.

What I notice from this year'€™s exhibition is that it does not really showcase small oil and gas industry players in Indonesia and instead highlights the big ones. I hope next year the exhibition will present more players, including the small ones, so that consultants like me can explore a lot of possibilities regarding industrial cooperation.

Maria
Oil and gas company employee

What motivates me to come here is the desire to understand the development of the oil and gas industry in a broader and comprehensive way. I also visited the booths of big companies in order to know the conditions and prospects of their businesses through their financial reports.

I am also very happy with the seminars and workshops conducted here as they help me to understand the broader context of Indonesia'€™s oil and gas industry. I hope next year the organizer will hold more seminars and workshops, particularly ones that aim at boosting technical and non-technical skills, especially ones related to health, safety and environmental aspects for people working in the industry.

I notice that this year'€™s exhibition attracts fewer participants than last year, which is understandable because the oil and gas industry has been facing a slowdown, with the global oil price declining by almost 50 percent. Hopefully the industry will recover soon so that next year the exhibition is able to attract more participants.