Energy
From The Report: Indonesia 2018
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Once a key pillar of the Indonesian economy, the energy sector has declined in influence as oil and gas production has fallen. The hydrocarbons segment, which is valued at an estimated $20bn, contributed 3% to state revenues in 2016, down from 14% in 2014 and 25% in 2006. Yet the value of Indonesia’s energy sector cannot be reduced to its direct contribution to national GDP, as the power and oil and gas sectors remain a critical component of the infrastructure necessary to sustain economic growth across every other industry.

This chapter contains an interview with Garibaldi Thohir, President Director, Adaro Energy.

Articles from this Chapter

Overview

At a crossroads: Government efforts are expected to increase power capacity and electrification ratios while expanding oil and gas production
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Once a key pillar of the Indonesian economy, the energy sector has declined in influence as oil and gas production continues to fall from peak levels. The hydrocarbons sector, which is valued at an estimated $20bn, contributed 3% to state revenues in 2016, down from 14% in 2014 and 25% in 2006. Yet the value of Indonesia’s energy sector cannot be reduced to its direct contribution to national GDP, as the power and oil and gas sectors remain a critical component of the infrastructure necessary…

Interview

Power and progress: Garibaldi Thohir, President Director, Adaro Energy, on boosting power generation through new endeavours
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Interview: Garibaldi Thohir What can be done to further facilitate the development of independent power producers (IPPs)? GARIBALDITHOHIR: An estimated $73bn of capital expenditure is required if the government is to reach its target of adding 35 GW of power by 2019. With Perusahaan Listrik Negara (PLN) responsible for 10 GW, new opportunities are opening up for private companies to generate the outstanding 25 GW. However, consistent policies and better coordination among government agencies…

Analysis

A redrawn contract: The gross-split revenue-sharing system is intended to simplify structures and slash red tape
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As the oil and gas sector has contributed progressively less to the state budget, policymakers are seeking ways to boost revenue from the industry. Walking the tightrope between an attractive investment climate and greater state revenue shares has proven challenging, particularly since the slump in oil prices began in 2014. New government regulations implemented since 2001 have affected the way the sector operates. REDRAWING THE RULES: The regulatory environment has been in a state of flux…

Analysis

Mixed signals: A new regional tariff system has been brought in for renewable energy producers
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Like many rapidly developing countries, Indonesia faces the dilemma of how to increase electricity-generation capacity while minimising tariffs levied on consumers. On one hand, Indonesia maintains ample domestic coal reserves which have traditionally served as an inexpensive, easy-to-access fuel supply. On the other hand, the world has become increasingly mindful that coal comes with environmental costs which have long-term economic and social ramifications, compelling policymakers to account…

Analysis

Strategic value: Four upstream oil and gas projects will be fast-tracked under a national programme
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As Indonesia’s natural gas production continues to recede from its peak in 2009, the government is looking to boost upstream activity by proposing four high-potential oil and gas projects for the list of national strategic projects (PSN). Under this programme, which was initiated by presidential decree in 2016, infrastructure projects deemed to be of national strategic importance are fast-tracked. The four upstream oil and gas projects that were proposed for the list by the Ministry of…

Analysis

A new deal: Electricity regulations introduced in early 2017 to bolster private investment in power production
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Seeking to support private investment for Indonesia’s 35-GW national power development initiative, regulators rolled out two new regulations in January 2017 intended to encourage efficient, fair and transparent development of the electricity supply. These regulations, which focus specifically on the power purchase agreement (PPA) between Perusahaan Listrik Negara (PLN), the state-owned power producer and transmission system operator, and independent power producers (IPPs), come at a time…