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The Paus block in the Natuna sea, South The minister added that while the country
Sulawesi’s Karaeng, East Kalimantan’s Maratua remained committed to expanding renewable
and Sumatra’s West Palmera blocks will be energy capacity and use, issues such as relia-
offered in a regular tender that will allow bidders bility needed to be addressed during the tran-
to choose between the PSC model or the gross- sition phase.
split scheme. The latter sees the government As such, Tasrif expects a low-carbon
take a greater share of a block’s production in upstream to play a key role in the country’s
exchange for reimbursing development costs. energy strategy during the transition. He
Bertak Pijar Puyuh is the only block to have seen added that the sector’s economic impact was
some exploration work. greater than simply its contributions to the
state budget.
Industry support “I observe that the use of national capacity in
The government introduced the gross split sys- the upstream oil and gas sector is quite large, in
tem in 2017 without consulting the upstream terms of both percentage and value. For instance,
industry, damaging investor confidence at the the use of national capacity had reached 57%,
time. However, the government introduced new with the procurement value touching an esti-
legislation in July 2020 that allowed contractors mated $2.54bn,” he said.
to choose between cost recovery PSCs or the He argued: “Oil and gas fields need to be
gross-split system. developed. The existing potentials must be
The government has been striving to boost explored to ensure energy supplies in future.
investor confidence for a number of years and Likewise, the potentials of non-conventional oil
has rolled out a number of incentives recently. In and gas fields must also be explored in order to
addition to the choice of contract model, Jakarta meet gas requirements in future,” he said.
also offers tax holidays, investment credit and As such, the government is counting on vari-
access to upstream data. As such, despite the ous emission reduction technologies to allow the
global push to adopt renewable and low-carbon country to raise its oil and gas production while
energy solutions, Indonesia is unwilling to aban- still meeting its climate change commitments.
don support for upstream investors.
Indonesian Energy Minister Arifin Tasrif, CCUS roadmap
who was also speaking on IOG 2021’s opening The head of upstream regulator SKK Migas, Dwi
day, said: “The upstream oil and gas industry Soetjipto, told the conference on November 29
will not spontaneously be abandoned because that his agency intended to publish a produc-
this industry is one of the pillars of the Indo- tion-friendly emissions reduction road map
nesian economy.” within the next four months.

Week 48 03•December•2021 www. NEWSBASE .com P7