The oil and gas industry was one of the first business sectors to incorporate IT services in every area, from exploration to downstream distribution.

Gunawan SUSANTO President Director IBM INDONESIA

in figures

Indonesian government's 2015 budget for infrastructureUSD 21.7 billion

Total capacity for two refineries planned by government600,000 bopd

Revamp Indonesia’s IT sector

January 19, 2016

Gunawan Susanto, president director of IBM Indonesia, speaks to TOGY about the growing role technology has in expanding Indonesia’s energy industry. With more than 1,000 clients in the country, IBM has been in Indonesia since 1937 offering software dedicated to the oil and gas industry as well as the mining and power generation sectors.

How can IT companies participate in Indonesia’s plans to improve the energy infrastructure in the country?
Indonesia tends to wait for more mature countries before adopting new technology. However, there is a real opportunity in the coming years with the government’s ambitious plans to improve infrastructure in Indonesia. By integrating IT in the design stage of projects, such as oil refineries, Indonesia will be able to get ahead of the curve. The Indonesian government has a 2015 infrastructure budget of USD 21.7 billion and plans to build two new refineries with a total capacity of 600,000 barrels of oil per day.
It will be more cost effective to implement latest IT from the beginning stages rather than retrofit it as an afterthought. IT is vital to the long-term success of these projects.

Why should the hydrocarbons industry prioritise IT services?

The oil and gas industry was one of the first business sectors to incorporate IT services in every area, from exploration to downstream distribution. It is an industry where efficiency saves money, protects the environment and promotes safety for employees.
Before upstream equipment fails, typically there is some kind of sign, such as a change in temperature or pressure. Effective technology will monitor these anomalies, allowing operators to take preventative action against errors as well as equipment failures. In the downstream sector, companies use this kind of analysis to determine the best route and optimise automation to save both time and money.


How does the energy industry use data to inform their operations?
Oil and gas companies use data to make better operational decisions, and effective data usage is important for companies that want to survive the low fuel prices environment.
The energy industry needs to understand what data really is and turn it into values. Data is the newest natural resource. The steps required for companies to do this are to mine, store and then analyse them. This information must then be turned into something that enables decision making.

What does Indonesia need to do to be competitive in the IT sector?

In the energy industry, the continued use of technology in operations has largely been driven by oil majors such as Total, BP and Chevron. These global companies have invested regularly and heavily in IT services, a decision that is driven by their headquarters to maintain competitiveness across international markets. This is one of the main reasons international oil companies dominate the more complex deepwater drilling projects.
In state-owned enterprises such as Pertamina, the push to invest in technology should be driven by the top leadership. In the past, Pertamina has been a leader in the adoption and application of technology. Leveraging technology needs to be sustained through changes in leadership, otherwise investment in IT will not yield an optimum return.

How have governmental regulations in Indonesia impacted the IT sector in Indonesia as it relates to energy?
There are a few key regulations that make it challenging for IT companies to do business in Indonesia. The first is permitting and licensing. The lengthy process and time to issue new permits is not helping to create a comfortable environment for investors. This is common across all sectors of business in Indonesia.
Government regulation No. 82 prohibits any financial data from being stored outside of Indonesia, which impacts most sectors. Furthermore, local content regulations, such as the requirement to do all business using the Indonesian rupiah, are also obstacles for international companies operating in Indonesia.

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