Page 6 - AsiaElec Week 48 2021

AsiaElec COMMENTARY AsiaElec

Indonesia weighs emission

commitments against energy needs

The government has said it will not walk away from the upstream,

despite its carbon neutrality pledge, and will focus on low-emissions

technologies to offset a rise in oil and gas production

INDONESIA INDONESIA remains committed to its oil and annual Indonesian international oil and gas
gas production goals for 2030 and beyond, even conference IOG 2021, Ariadji said: “We invite
WHAT: though it has also pledged to reduce its carbon potential investors who are interested, who have
Indonesia is banking emission to net zero by 2060. technical capabilities and have good financial
on CCUS projects in the The government has insisted that the ability to participate in this bidding round.”
upstream. upstream sector can remain a key pillar of the The official said the government would offer
national economy and is counting on low-emis- production-sharing contracts (PSCs) for the
WHY: sion technologies – such as carbon capture, uti- Bertak Pijar Puyuh block in Sumatra, North
The country wants to lisation and storage (CCUS) – to help minimise Java’s North Ketapang and Agung I blocks, and
ramp up oil and gas the oil and gas industry’s footprint. South Sulawesi’s Agung II block.
production in the coming Jakarta has set a 2030 production target of The winning bidders, to be decided via a
years. 1mn barrels per day (bpd) of oil and 12bn cubic “direct proposal tender”, will be expected to
feet (340mn cubic metres) per day of gas. The cover development costs in exchange for a
WHAT NEXT: government remains committed to these figures greater share of production.
Pertamina is investing despite this year’s oil lifting target having been The Paus block in the Natuna sea, South
in the technology’s reduced in October from 705,000 bpd to 665,000 Sulawesi’s Karaeng, East Kalimantan’s Maratua
commercial viability. bpd, while the gas lifting target was revised down and Sumatra’s West Palmera blocks will be
from 5.64 bcf (159.72mn cubic metres) per day offered in a regular tender that will allow bidders
to 5.53 bcf (156.61 mcm) per day. to choose between the PSC model or the gross-
Banking on CCUS technology, whose com- split scheme. The latter sees the government
mercial viability as part of Indonesian projects take a greater share of a block’s production in
remains unknown, Indonesia has announced its exchange for reimbursing development costs.
latest exploration bid round. Bertak Pijar Puyuh is the only block to have seen
some exploration work.
Upstream bid round
The Indonesia Energy Ministry launched its Industry support
latest upstream exploration bid round this week, The government introduced the gross split sys-
inviting offers for eight new blocks. tem in 2017 without consulting the upstream
The acreages contain at least 500mn barrels of industry, damaging investor confidence at the
oil and 22 trillion cubic feet of gas, the ministry’s time. However, the government introduced new
director general of oil and gas, Tutuka Ariadji, legislation in July 2020 that allowed contractors
said on November 29. to choose between cost recovery PSCs or the
Speaking during the first day of the second gross-split system.

P6 www. NEWSBASE .com Week 48 01•December•2021