Indonesia is the largest gas supplier in Southeast Asia, with total exports of around 45% of production. Going forward, the projected production and use for primary energy supplies will increase. Therefore, gas has become one of the strategic energy sources for Indonesia. On the upstream side, there is an industry obligation policy to supply the domestic market obligation (DMO), but on the other hand, the national industry is not ready to absorb and use the DMO supply. In addition, the effectiveness of gas utilization is also a problem, among others; there are many business entities in the form of ‘brokers’ who do not actually build infrastructure (pipelines) for the distribution and allocation of gas demand. This automatically leads to a longer rent seeking chain – which causes gas prices (LPG / LNG) for consumers / end users to be even higher. Accordingly, the miss-interconnection between the upstream and downstream sectors of the gas causes in-efficiency, which in the long run, will be a problem for energy security.
As a strategic partner in the Corruption Eradication Commission (KPK) in the coordination and supervision of the energy sector (Korsup Energy), Publish What You Pay (PWYP) Indonesia also conducts monitoring, coordination and supervision with relevant agencies (Ministries/Government Institutions) and other key stakeholders such as business entities, local governments, CSOs, experts/academics, and other relevant stakeholders.
PWYP Indonesia together with Korsup KPK, and supported by the Natural Resource Governance Institute (NRGI), conducted a brief study to map the governance issues of the gas sector along the extractive industry value chain. This research is expected to provide an overview of the gas governance value chain and see critical points of problems – such as the gap between regulation and implementation, the level of compliance of industrial entities, transparency and accountability, cost efficiency and effectiveness, as well as potential leakage and economic rent seeking extractive value chain. In addition, this research is also expected to contribute to the revision of the oil and gas law, which is currently a national legislative program, where the issue is an agenda of priority advocacy for PWYP Indonesia.
This research will use a qualitative analysis approach, including using primary and secondary data, collected through references, desk studies, discussions with experts, in-depth interviews, and focus group discussions (FGD) with stakeholders.
Some forms of activities carried out in this study are:
- Kick of meetings that aim to sharpen the design and scope of research, develop research work plans, also to obtain input related to research design updates both from PWYP Indonesia coalition members and other CSOs that have focused on advocacy on extractive issues.
- Literature study that aims as an effort to collect data, material, and to structure information and knowledge about extractive industries, especially natural gas.
- In-depth interviews are aimed at obtaining information from sources. The speakers came from ministries/institutions, private sector, and academics.
- An expert discussion series was held to obtain information from expert sources, and validate the information that has been collected, get input from research findings.
PWYP Indonesia will hold public discussions/seminars in an effort to disseminate the results of research to related stakeholders in the gas sector such as relevant Ministries/Institutions, private sectors, academics, media, and civil society groups.