Upstream Oil and Gas Industry will not be Abandoned, Says Energy Minister

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 420.Pers/04/SJI/2021

Date: 29 November 2021

Upstream Oil and Gas Industry will not be Abandoned, Says Energy Minister

Minister of Energy and Mineral Resources (EMR), Arifin Tasrif, affirmed that the upstream oil and gas industry would not be abandoned despite the global trend toward cleaner, less polluting, and environmentally friendly energy.

"The upstream oil and gas industry will not be abandoned because this industry is one of the pillars of Indonesia's economy. The multiplier effect of the industry has been felt by the supporting industries. In 2020, the upstream oil and gas subsector accounted for 57 percent of national capacity use, with a procurement value of around USD2.54 billion," said Arifin at the 2nd International Conference on Indonesian Upstream Oil and Gas of 2021 held on Monday (29/11) in Bali.

Arifin also said that the upstream oil and gas industry had developed into a driving force for supporting industries. The upstream oil and gas industry, which was originally designed to generate state revenues, has developed into one of the driving engines for businesses such as banking, hotels, and so on.

"In a rough calculation, every USD1 invested will generate USD1.6 which is enjoyed by the supporting industries," explained Arifin.

For this reason, the fossil industry envisions a low-carbon, upstream oil and gas industry in the energy transition era.

"The low-carbon, upstream oil and gas industry is the vision of the fossil industry in the era of energy transition. The upstream oil and gas industry, especially that of gas, will support energy during the transition period and will be developed to replace coal energy," Arifin continued.

The government is making every effort to maximize domestic gas absorption, for example by adopting a policy on special price for the electricity subsector and certain industries expected to lift gas consumption. Therefore, it is necessary to develop new oil and gas fields. Existing potential must also be explored to ensure the supply of energy in the future.

"Even the potential of non-conventional oil and gas fields must also be explored to meet future needs. This process is not simple, and requires the support and cooperation from all stakeholders. Advanced and environmentally friendly technologies are also needed to answer the challenge," Arifin emphasized.

Arifin went on to appreciate SKK Migas and contractors of production-sharing contracts (PSC) for using technologies to reduce carbon emissions in oil and gas field development. Arifin expected the strategy would continuously be monitored and implemented accordingly, so that production increase would be achieved at the same time with emissions reduction.

There are plenty of opportunities to invest not only in Indonesia's oil and gas industry but also in the development of the country's energy transition and carbon reduction businesses.

"Investment stimulus will be continuously evaluated to enable Indonesia to win the competition and meet the production increase target," Arifin concluded. (IY)

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