Energy & Mineral Resources
From The Report: Indonesia 2020
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Indonesia has long been a key supplier to global energy markets, but focus has shifted from export-oriented production towards meeting domestic demand. Current objectives include meeting the demand for consumer fuel through crude and palm oil, addressing electricity demand via coal and renewables, and using natural gas to supply predominantly industrial consumers. The government aims to consolidate control over upstream crude oil activities, primarily through the state-owned enterprise Pertamina, but still welcomes foreign investment in the sector. Long considered one of the world’s premier mining destinations, Indonesia finds itself in a transition period in 2020 amid significant questions about the future of the industry. The archipelago is home to considerable reserves of a wide variety of metals that are crucial to the global economy, and several metals that are key inputs for electric vehicles and industrial-scale batteries. This provides opportunities for foreign investment in mining services and downstream industries. This chapter contains interviews with Dwi Soetjipto, Chairman, SKK Migas; and Hilmi Panigoro, President Director, MedcoEnergi.

Articles from this Chapter

Overview

Capacity for change: As oil fields mature and domestic consumption rises, the sector refocuses on boosting upstream activity and revenue
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Indonesia has long been a key supplier to global energy markets, with the first oil discovery made in North Sumatra in 1885. Energy production has grown since then to include gas, coal and renewables, but the industry’s role within the country has evolved as oil fields have matured and the population has continued to grow. The focus has shifted from export-oriented production towards meeting domestic demand. Meanwhile, Indonesia is currently a net importer of petroleum products – a status…

Analysis

Energy remix: A revised plan for electricity generation aims to expand the use of renewables alongside coal
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Indonesia had planned to add 35 GW of new capacity by the time President Joko Widodo, better known as President Jokowi, concluded his first term in 2019. This target has not yet been achieved, and the government has reappraised its outlook for the sector in its Electricity Supply Business Plan (RUPTL) 2019-28. Several elements of the state’s strategy remain the same as the previous plan, RUPTL 2018-27, including the use of coal as the preferred feedstock for generating power, and a desire…

Interview

Upstream revival: Dwi Soetjipto, Chairman, SKK Migas, on cutting red tape and revamping production processes
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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…

Analysis

Multiple approaches: Commercial incentives and improved data sharing are being implemented in an effort to boost oil output
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Oil production has been in steady decline for much of the past two decades in Indonesia, but the state aims to reverse this trend and achieve a production target of 1m barrels per day (bpd) by 2030. This will require investment from both domestic and foreign players, with policymakers searching for the right mix of state control and commercial incentives to achieve this. The upstream exploration required to boost production has been flagging, with the number of exploration wells dropping…

Interview

Responsible development: Hilmi Panigoro, President Director, MedcoEnergi, on the environmentally conscious growth of oil and gas companies
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Interview:Hilmi Panigoro What are your expectations for growth in the upstream oil and gas segment for the medium term? HILMI PANIGORO: The last decade saw significant changes in Indonesia’s oil and gas landscape. Unfortunately, oil production has been in decline while consumption has steadily risen. However, the archipelago has many geological basins that have yet to be properly explored. In light of this, the government needs to improve the attractiveness of the investment climate in…

Overview

Expanded role: Government efforts see greater consolidation of the mining sector and the development of domestic supply chains
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Long considered one of the world’s premier mining destinations – for coal, as well as for precious and industrial metals – Indonesia finds itself in a transition period in 2020, with significant questions being raised about the future of the industry. In recent years the government has sought to expand and consolidate its role in terms of ownership of the sector, but this has been met with pushback from private sector mining companies. Some overseas players have chosen to leave the…