Dwi Soetjipto, Chairman, SKK Migas: Interview

Dwi Soetjipto, Chairman, SKK Migas

Interview: Dwi Soetjipto

Which projects are currently in the pipeline, and how will these help address rising oil imports resulting from decreased production?

DWI SOETJIPTO: SKK Migas has four strategies to increase production and to expand our upstream segment in the short, mid and long term. First, we wish to optimise our current base production. Second, we aim to accelerate the value chain, enhancing the speed at which reserves are brought to mid-stream players. Third, we want better implementation of our enhanced oil recovery practices. Lastly, we want much more exploration to occur, which is why we aim to create a business ecosystem more welcoming to further exploration. If we consider why decline in production occurred initially, it relates to a weakness in all of these aspects, but is primarily due to the lack of exploration and discovery of new reserves. With this strategy in place, we hope to return to production levels of 1m barrels per day by 2030.

In 2019, 2169 sq km were explored through 2D-seismic exploration, while 3D-seismic exploration covered 6837 sq km. That year 36 wells were drilled, with five already active. In 2020 around 400 wells are planned to be drilled, and we expect this total to increase substantially through to 2023. We believe this will help to increase our export potential.

How can regulations be further streamlined to facilitate collaboration between the government, state-owned enterprises and the private sector?

SOETJIPTO: By reducing red tape the government aims to streamline bureaucratic procedures. The process of approving licences and permits is becoming smoother. The government will continue to further simplify regulations in 2020. Priority areas for easing regulations will include environmental compliance, production boosting and support to services.

We are aiming to transform our own systems and methods of interaction with outside investors in the upstream segment. We will implement a onedoor policy in 2020, which will be fully operational by 2021, enabling upstream investors to utilise our systems to easily obtain all licences and permits, and to communicate with ministries.

When it comes to exploration, studies, production and commercial tenders, we are focused on alleviating the effort that investors have to make. This overarching system will considerably increase the ease of investing in the upstream segment. There must also be better synergy between investors and us. Our systems can now show all upstream projects in real time, allowing use to watch and support activity in the field. We can, moment by moment, stay up to date with operations such as drilling. This is why another important aspect of our new system is the focus on improving the ease of access to data. We are seeking to establish an open data system that allows for interested parties to have an up-to-date and readily available understanding of the dynamics of drilling and exploration in Indonesia.

What do you expect the future will hold for the oil and gas sector in Indonesia?

SOETJIPTO: Indonesia has 128 oil basins, but only 54 of these have been fully explored so far, leaving 74 basins untouched. Of the 54, only 20 are in full production. We believe we can enter a golden era for the oil and gas sector in Indonesia. The country just has to make proper use of its natural resources and, to do this, we need the support of both the government and investors.

The government has been very supportive, empowering investors within the sector. Oil and gas has the potential to be a key employer in Indonesia and we want to build this sector in favour of the Indonesian people. President Joko Widodo is focused on simplifying regulations and, together, we are working towards building an investor-friendly ecosystem.

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The Report: Indonesia 2020

Energy & Mineral Resources chapter from The Report: Indonesia 2020

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