Page 7 - AsiaElec Week 48 2021

AsiaElec COMMENTARY AsiaElec

The government has been striving to boost CCUS roadmap
investor confidence for a number of years and The head of upstream regulator SKK Migas, Dwi
has rolled out a number of incentives recently. In Soetjipto, told the conference on November 29
addition to the choice of contract model, Jakarta that his agency intended to publish a produc-
also offers tax holidays, investment credit and tion-friendly emissions reduction road map
access to upstream data. within the next four months.
As such, despite the global push to adopt SKK Migas has said the industry would need
renewable and low-carbon energy solutions, to reduce its emissions by focusing on CCUS
Indonesia is unwilling to abandon support for technology, eliminating gas flaring, reducing
upstream investors. methane leaks and planting mangrove trees.
Indonesian Energy Minister Arifin Tasrif, Soetjipto said: “Emission reduction efforts
who was also speaking on IOG 2021’s opening and carbon capture are no longer a choice but
day, said: “The upstream oil and gas industry will an obligation.”
not spontaneously be abandoned because this SKK Migas planning deputy Benny Lubi-
industry is one of the pillars of the Indonesian antara, meanwhile, said: “We imagine it will be
economy.” required for all plans of development to include
The minister added that while the country CCUS. It is going to be a typical offering because
remained committed to expanding renewable of net-zero.”
energy capacity and use, issues such as reliabil- CCUS is fast turning into a silver bullet for the
ity needed to be addressed during the transition oil and gas industry, with producing countries
phase. across the Asia-Pacific banking on its develop-
As such, Tasrif expects a low-carbon ment over the coming decade to help ensure
upstream to play a key role in the country’s their natural resource industries remain relevant
energy strategy during the transition. He added in the coming decades.
that the sector’s economic impact was greater However, the technology’s commercial via-
than simply its contributions to the state budget. bility for a wide variety of upstream projects is
“I observe that the use of national capacity in still unproven. Indeed, Soetjipto said the tech-
the upstream oil and gas sector is quite large, in nology needed to demonstrate that it was effi-
terms of both percentage and value. For instance, cient “before we talk about incentives”.
the use of national capacity had reached 57%, Indonesia’s state-owned Pertamina said in
with the procurement value touching an esti- early November that the cost of installing the
mated $2.54bn,” he said. country’s first two CCUS projects at the Gundih
He argued: “Oil and gas fields need to be and Sukowati oil and gas fields could be as much
developed. The existing potentials must be as $500mn.
explored to ensure energy supplies in future. The projects are separate from Pertamina’s
Likewise, the potentials of non-conventional oil memorandum of understanding (MoU) on
and gas fields must also be explored in order to CCUS with US super-major ExxonMobil, which
meet gas requirements in future,” he said. was signed on November 2 during the COP26
As such, the government is counting on vari- summit in Glasgow. The agreement committed
ous emission reduction technologies to allow the the companies to evaluate the potential for large-
country to raise its oil and gas production while scale deployment of low-carbon technologies in
still meeting its climate change commitments. Indonesia.™

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