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Foreign investment for oil exploration?
A highly respected geoscientist from Indonesia stated, “I want to know how it works, but if we continue to discuss this, we will never know if it works.” Therefore, the answer is to use the technology.
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Pertamina workers are transported in a personnel transfer basket from a ship to the company’s oil rig off the coast of Madura Island in East Java in this undated file photograph. (JP/Wahyoe Boediwardhana)
I
ndonesia will be remiss if it does not solidify its role as a regional leader in ASEAN, according to an official statement in a recent newspaper article. The same could also apply if the country does not capitalize on the abundance of natural and human resources that it has in situ.
Energy and Mineral Resources Deputy Minister Arcandra Tahar made a working visit to the United States recently as part of follow-up efforts to cooperate with international companies to increase investment in the national oil and gas sector.
Is this a reversal from when it appeared that the government did not want international companies to be involved in the resource industry?
It was stated that innovation is not limited to technology alone, but also new policy breakthroughs like the gross-split production sharing contract (PGS). It is a kind of innovation.
It was also stated that ExxonMobil and ConocoPhillips were very enthusiastic and surprised to hear about the changes that the Energy and Mineral Resources Ministry has made, especially with regard to the new fiscal policy of the PGS. I would be surprised if they and other companies were not fully aware of the changes. It remains to be seen what action these companies will take.
Changes in regulations certainly help, although this is pointless unless technology for exploration is adopted and accepted by the government. It is fair to say that some of the companies that are part of the PGS scheme at this time are confused over the clarity of the regulations. Certainly, the message coming out of the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) is different to the interpolation by the PGS companies, which is different to a message given by the deputy minister to a colleague of mine, which was that the government will stand back and allow technology to be used.
But here lies a problem: most if not all companies are waiting to see another company use new technology and if it works, they will use it. This was stated recently by a respected company involved in geothermal development: “We are a company that follows.”
