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Govt's energy deregulation vow draws global giants
Increased regional investment by global energy giants, including oil majors such as Shell, Chevron and TotalEnergies, appear to be signaling corresponding renewed interest in Indonesia's oil and gas assets amid its push for energy self-sufficiency and deregulation.
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Thin clouds hang over an offshore oil and gas rig in the Mahakam Block in the waters of East Kalimantan in this undated handout photo. (Pertamina/Pertamina)
G
lobal oil and gas giants appear to be taking a renewed interest in Indonesia’s upstream oil and gas sector amid the government’s push for energy security and promise of deregulation.
Putra Adhiguna, managing director at the Energy Shift Institute, told The Jakarta Post on Friday that some increase in upstream oil and gas investment had been observed in Southeast Asia, driven partly by declining domestic gas production and the looming risk of higher liquefied natural gas (LNG) imports.
In Indonesia, this trend is reflected in the anticipated return of major players like Shell, Chevron and TotalEnergies. South Korea’s Daewoo Engineering & Construction (ENC) is also reportedly looking to invest around US$1 billion across various industries, including oil and gas.
“The region is responding to the pressure of falling output and rising demand, which could make reliance on imported LNG a costly and risky proposition,” said Putra.
The country has been struggling to increase domestic production of ready-to-sell oil and gas, also known as lifting, despite its importance in achieving energy security and self-sufficiency, as envisioned by multiple administrations to cut costly energy imports.
This was partly due to aging fields, limited new discoveries, regulatory uncertainties and infrastructure constraints that have hindered production growth in spite of ongoing efforts.
During the International Petroleum Association Convention & Exhibition (IPA Convex) on Wednesday, President Prabowo Subianto personally asked his aides to simplify upstream regulations to boost oil and gas output, followed by a threat that he would remove officials who refused to do so.
