The event, held in collaboration with Bimasena, Indonesian Petroleum Association and SKK Migas, fostered a dialogue on energy-related topics between the government and the private sector, gathering top-level executives from across Indonesia’s oil and gas value chain. Representatives from BP, Pertamina, Statoil, ConocoPhillips, Medco Energi, Vico, Ophir, Chevron, Petronas, Mandiri Oil, Talisman and Schlumberger, to name a few, joined a comprehensive discussion on the oil and gas investment climate in Indonesia. Topics included increasing attractiveness in regional and international markets.
The panel of speakers comprised Deputy Minister of Energy and Mineral Resources Arcandra Tahar, International Petroleum Association president Christina Verchere, Bimasena energy executive Ari Soemarno, World Bank representative Nathaniel Adams, ConocoPhillips president and director Bijan Agarwal, SKK Migas vice-chairman Sukondo, Ministry of Finance representative Suryo Utomo and MedcoEnergi COO Ronald Gunawan.
The event focused on the country’s newly revised gross-split scheme, which is currently gaining momentum. The changes have been positively received by industry operators, along with efforts to improve the competitiveness of the Indonesian upstream sector.
“When we apply consistent assumptions regarding ICP [Indonesian crude price], field profile and tax treatment, our preliminary modeling suggests that investor IRR [Internal Rate of Return] and NPV [Net Present Value] under the gross-split scheme is likely to be no worse than under a cost recovery scheme. In some cases, it may be marginally higher,” Nathaniel Adams of the World Bank commented on the topic during the roundtable.
However, while it is reassuring that the Indonesian government has revisited the terms of the gross-split PSC, industry operators still question which tax terms the Ministry of Finance will apply to the contracts. The participation of government bodies in the discussion signals a willingness to listen to concerns raised by upstream operators.
“In the future, I hope that all parties are part of the solution, not part of the problem. I believe that by listening, everything can be clarified and resolved. I am also trying to listen more than speak,” Deputy Minister of Energy and Mineral Resources Tahar said.
His eminency, professor Dr. Subroto, closed the ceremony by inviting government representatives and private sector operators to continue to find channels of dialogue and to work together to find win-win solutions to challenges facing the country’s hydrocarbons industry. Professor Subroto also expressed confidence that collaborative efforts will ultimately benefit the people of Indonesia by ensuring the island nation’s future energy security.
“The important thing that we learned today is that problems exist and that they have to be addressed by finding win-win solutions. The openness of the discussion from deputy minister Tahar shows that the government is ready to listen to suggestions provided by the industry. There is also a clear willingness from both the private sector and the government to sit together and improve channels of communication,” professor Subroto stated in his closing remarks.
An edited version of the discussion will be published in full on TOGYiN and in The Oil & Gas Year Indonesia 2018.
TOGY is a leading supplier of strategic communication, business intelligence and networking services dedicated to the global energy industry. The publication produces annual country specific reports for more than 35 petroleum markets around the world. The Oil & Gas Year Indonesia 2018 will be TOGY’s fourth consecutive edition on the island nation and will offer a unique opportunity to provide in-depth analysis of the country’s energy industry as seen through the eyes of the country’s leading energy executives. TOGY reports are valuable resources and critical tools for energy investors around the world, highlighting and promoting key actors, companies, projects and opportunities. TOGY distributes copies to executives and government members in 101 countries.