Minister of Energy and Mineral Resources: Oil and Gas Sector TKDN Must Be Increased

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS CONFERENCE

NUMBER: 320.Pers/04/SJI/2024

Date: June 14, 2024

Minister of Energy and Mineral Resources: Oil and Gas Sector TKDN Must Be Increased

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif accompanied by the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto and Director of Upstream Oil and Gas (Migas) Ariana Soemanto visited the production facilities of PT Saipem Indonesia Karimun Yard (SIKY).

PT SIKY produces oil and gas structures for domestic and international needs and recently expanded its production range by extending it to the field of Renewable Energy. It is the largest fabrication yard of the Saipem group and one of the largest in the Southeast Asian region with a total area of 1,392,382 square meters, with more than 6,000 square meters of office space, 60,000 square meters of covered workshops. The yard is also equipped with its own marine base and docks for a total length of about 900 meters. The maximum nominal production capacity is 90,000 tons/year (simple structure), 35,000 tons/year (complex structure). The products are used for the construction of oil and gas projects, such as constructing the platforms for onshore, offshore, and in the renewable energy sector.

The existance of PT SIKY has strategic value for Indonesia due to the discovery of large oil and natural gas reserves such as in the Masela Block, Andaman Block, Kutei Block, and Ubadari Carbon Capture project. "With its capabilities and experience, we believe PT SIKY can support the implementation of these strategic projects in order to support the Government in achieving the target of increasing national oil and gas production and energy transition policies," said Arifin on Karimun Island, Riau Islands, Wednesday (12/ 6).

As part of the commitment to increase the independence of national industry, Arifin hopes that PT SIKY can increase the Domestic Component Level (TKDN). "We really encourage Saipem to fulfill TKDN as much as possible and utilize domestic equipment. This will not only support local industry but will also create new jobs and strengthen our human resource capacity," continued Arifin.

The Head of SKK Migas said that massive and aggressive upstream oil and gas investment must be balanced with the readiness of manufacturers to meet increasing project needs so that investment commitments that have been approved by SKK Migas and KKKS on work, program & budget (WPnB) cannot be implemented. entirely due to lack of preparedness of vendors providing goods/services.

"Visits to domestic manufacturers, namely Saipem Indonesia and Baker Hughes, are a form of direct support from the Government and SKK Migas for the use of domestic products. "SKK Migas is committed to continuing to increase the use of domestic products, which this year is targeted to reach 57%," said Dwi.

he added, steps to secure the supply of goods from manufacturers for upstream oil and gas projects must be taken considering that some of the products from these manufacturers are also exported. Like Saipem Indonesia products which are mostly exported to Angola, Scotland, Australia and Qatar. "Through this visit, SKK Migas conveyed the needs of upstream oil and gas projects. It is hoped that manufacturers can adjust their capacity so that they can also meet supply needs for upstream oil and gas projects," added Dwi.

He explained that the planned procurement of upstream oil and gas goods/services in 2024 will reach around US$ 13.9 billion or the equivalent of around Rp. 219 trillion, so with the TKDN target of 57% there will be around Rp. 124.8 trillion in upstream oil and gas spending in the country. "Economically, this will have a huge multiplier effect at the central and regional levels, both in regional tax growth, employment opportunities and of course stronger domestic industrial capacity," he said.

Meanwhile, Managing Director of Saipem Indonesia Mr. Pierangelo Abela said" Since the beginning of operations, in 2010, SIKY has delivered offshore installations and integrated modules for Floating Production Units, Subsea Structures for oil and gas field development, as well as structures for the offshore wind energy sector. SIKY has been involved in all major upstream projects in Indonesia and thanks to synergies with other companies in the Saipem group, has exported its products throughout the world, in Europe, the Middle East, Africa and East Asia and in the coming years we project an increasing role for domestic projects in Indonesia".

Currently, the total workforce at SIKY is more than 4,000 people, of which more than 90% are Indonesian citizens. In addition to absorbing local labor, as one of the most important industrial companies on Karimun Island, SIKY has a significant socio-economic impact on the local population and continues to provide value to thousands of families. In addition, SIKY annually develops and implements plans for local community initiatives and non-profit initiatives in the fields of health, education and the environment with the aim of creating long-term value on the island. (SF)

Head of the Communications, Public Information Services and Cooperation Bureau

Agus Cahyono Adi

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