Jakarta, PWYP Indonesia – PWYP Indonesia discussed the theme “The Future and Challenges of National Oil and Gas Management online on Wednesday (3/2) in preparation for the 2021 National Working Meeting. The theme was chosen because of national oil and gas management’s challenges regarding regulations, policies, institutions, and governance. Moreover, oil and gas reserves and production have continued to decline, along with the decline in upstream oil and gas investment. Meanwhile, oil and gas imports are increasing and are a threat to Indonesia’s energy crisis. Not only that, the aspirations and interests of the region and local communities also need to be heard.
Aryanto Nugroho, the National Coordinator of PWYP Indonesia, opened the discussion by presenting the PWYP Indonesia General Meeting of Members’ vision and mission, which are the vision and mission of PWYP Indonesia, as well as the coalition priority agenda for 2020-2024.

Komaidi Notonegoro, Director of the ReforMiner Institute, explained the national oil and gas sector’s condition. He emphasized several challenges in the energy sector that Indonesia must face, including: (1) energy resources are still a source of foreign exchange for the country; (2) production decline and oil and gas price fluctuations; (3) energy access and infrastructure; (4) dependence on imports of oil fuel and LPG; (5) new and renewable energy prices are not yet competitive; (6) new and renewable energy utilization is still low; (7) energy utilization is not efficient; (8) mastery of science and technology is still low; (9) geopolitical conditions and environmental issues; (10) national energy reserves.

Komaidi Notonegoro, Executive Director of ReforMiner Institute, explained that Indonesia’s investment climate’s complexity made the index of the ease of doing business in Indonesia ranked 73 out of 190 countries, lagging far behind neighboring countries. “The problems of Indonesia’s upstream oil and gas regulation are not far from three main things, such as legal uncertainty, fiscal uncertainty, and complexity of administration, bureaucracy and licensing,” said Komaidi.

Ananda Idris, Executive Team Member of Bimasena Energy Society, gave his views regarding Indonesia’s oil and gas investment. He admits that he is pessimistic because the Oil and Gas Bill has not been completed (2008-present). It indicates that the oil and gas sector is not prioritized as the Mineral and Coal Bill and the New and Renewable Energy Bill. Ananda explained that the oil and gas sector problems occur due to the absence of leadership, which causes poor governance both upstream and downstream. The good synergy between upstream and downstream is believed to revive the oil and gas industry, especially investment in the upstream sector, which has declined in recent years.

Furthermore, Ananda explained that the domestic oil and gas potential is still relatively large, especially in the deep sea and frontier areas. However, due to the lack of investment, these potentials have not been discovered. The regulatory framework and institutional framework are not good enough that companies are not interested in investing. Ananda regrets that the energy transition from fossil fuel to renewable energy will make the oil and gas industry appear “diverted” where banks and large companies do not want to invest in Indonesia’s oil and gas activities, even though the potential reserves are still quite large.

“The Oil and Gas Bill needs to be completed, and the transition from fossil fuel to new energy must be regulated to manage oil and gas optimally. So that there is a synergy between the Oil and Gas Bill and the New and Renewable Bill. On the other hand, the oil and gas industry’s management needs to use pyramidal governance so that from the top-down level integrate one vote and change the mindset from “fire fighting” to “fire prevention,” added Ananda.
Several issues recorded and would be the attention of PWYP Indonesia and Coalition Organization in the future are oil and gas revenue sharing funds and fiscal aspects related to regional interests and escorting the energy transition from fossil energy to new and renewable energy. Through a discussion that was also attended by members of the steering committee and coalition member organizations. (hbw)