Indonesia currently has abundant gas resources, with proven oil and gas resources in 2013 of 3.7 billion barrels of oil and 103 TCF of gas. However, the abundance of gas resources is not necessarily accompanied by easy domestic gas management.

One of the challenges in gas management in the upstream sector is the uncertainty of regulations where regulations often change, and the bureaucracy’s complexity, from the discovery of new gas wells to gas production. According to Arifin, Chairman of the LNG & Gas Committee, Indonesia Petroleum Association (IPA), in a discussion on “Problem Map and Gas Management along the Extractive Industry Value Chain” (25/4), regulatory uncertainty and the complexity of the bureaucracy have triggered a long process of gas management in the upstream sector.

He explained the length of the gas management process in the upstream sector and the length of time required. For example, suppose gas is found in a field. In that case, it takes about 6-12 months to process the commercial certification, then around 24-30 months in arranging a gas contract, 6-12 months dealing with a gas transportation agreement, 12-18 months preparing a Plan of Development, Authorization for Expenditure, Work Plan & Budget, as well as 48-60 months for the procurement process, then gas delivery.

Eddy Asmanto, Secretary-General of the Indonesia Natural Gas Trader Association, highlighted the aspect of business certainty. According to him, the gas business is a long-term business and requires complicated and expensive infrastructure for storage and distribution, so it requires certainty in the game rules to guarantee a return on investment.

Another challenge is that 75% of oil and gas resources are currently located in the deep sea in eastern Indonesia, with 85% dominated by gas resources. With this location in deep water, the current production time is longer than the previous era. It is estimated that it will take about 20 years from discovery to production.

Arifin added, it is necessary to simplify the bureaucracy so that the bureaucracy is not complicated so that finding new oil and gas to production does not take a long time. It is also necessary to increase investment in the upstream oil and gas sector to encourage new oil and gas reserves in frontier areas.